ProQuest Export

Oil Prices Slip on Unexpected Storage Build; Amount of Crude in Storage the Highest Since July 4

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Nov 2014: n/a.

Abstract:

Distillate stocks, which include heating oil and diesel fuel, fell by 2.1 million barrels to 114.8 million barrels, the lowest since May 9.

Links: 360 Link to Full Text

Full text:

NEW YORK--Oil prices settled slightly lower Wednesday, paring earlier gains, after weekly U.S. inventory data showed crude supplies unexpectedly climbed last week.

U.S. crude-oil stockpiles rose by 2.6 million barrels to 381.1 million barrels in the week ended Nov. 14, the U.S. Energy Information Administration said. Analysts surveyed by The Wall Street Journal had expected stocks to fall by 1 million barrels on the week. The amount of crude in storage is the highest since July 4.

"It certainly is not the report the bulls wanted to see to stem the downtrend" in oil prices, said Kyle Cooper, analyst at IAF Advisors in Houston.

Oil prices have been falling for months on concerns about ample global supplies, partly because of high U.S. production.

This week, futures have held fairly steady as traders watched for indications of whether the Organization of the Petroleum Exporting Countries would cut output to raise prices at its Nov. 27 meeting. Market watchers have become increasingly skeptical in recent weeks that OPEC, and especially top exporter Saudi Arabia, is likely to take action.

"With the prospect of production cuts, I think that traders are really reluctant to get very short before the meeting," said Andy Lebow, senior vice president for energy at Jefferies LLC. Short positions are wagers on falling prices. At the same time, Mr. Lebow said, traders are hesitant to bet on rising prices in case OPEC doesn't cut production.

The market is "definitely in a holding pattern," Mr. Lebow said. "You may see some real random moves here."

Light, sweet oil for December delivery settled down 3 cents at $74.58 a barrel on the New York Mercantile Exchange. The December contract expires at settlement Thursday. The more-actively traded January contract fell 14 cents, or 0.2%, to $74.50 a barrel.

Brent fell 37 cents, or 0.5%, to $78.10 a barrel on ICE Futures Europe.

In the U.S., domestic oil production fell slightly last week but held above 9 million barrels a day. Production surpassed that level last week for the first time in decades.

Gasoline stockpiles rose by 1 million barrels. Analysts surveyed by The Wall Street Journal had predicted stockpiles would rise by 600,000 barrels.

Distillate stocks, which include heating oil and diesel fuel, fell by 2.1 million barrels to 114.8 million barrels, the lowest since May 9. Analysts had expected a 1.4-million-barrel weekly decrease.

Refining capacity utilization rose by 1.1 percentage points to 91.2%. Analysts had predicted the operating rate would gain 0.3 percentage point in the week.

December reformulated gasoline blendstock, or RBOB, settled up 0.06 cent at $2.0438 a gallon.

December diesel fell 2.23 cents, or 0.9%, to $2.3590 a gallon, the lowest settlement since Nov. 30, 2010.

Credit: By Nicole Friedman

Subject: Petroleum industry; Crude oil prices; Petroleum production

Location: United States--US

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 19, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1625840515

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1625840515?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Technip Proposes $1.83 Billion French Oil-Services Merger; Move Comes Amid Consolidation in Oil-Services Industry

Author: Landauro, Inti; Williams, Selina

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.

ProQuest document link

Abstract:

PARIS--France's Technip SA has made a preliminary takeover offer of [euro]1.46 billion ($1.83 billion) in cash for smaller French oil-services company CGG, a sign of accelerating consolidation in the sector as falling oil prices have crimped spending by big oil groups.

Links: 360 Link to Full Text

Full text:

PARIS--Technip SA of France has made a preliminary takeover offer of [euro]1.46 billion ($1.83 billion) in cash for smaller French oil-services company CGG SA, a sign of accelerating consolidation in the sector as falling crude prices have crimped spending by large oil producers.

CGG, a Paris-listed specialist in exploration equipment and services, said it has rejected the offer. "Conditions to pursue [the approach] weren't met," the company said in a written statement Thursday. "The company isn't for sale," a spokesman added.

Technip said it would break up CGG, selling its underground data-collection unit that accounted for roughly 60% of the company's $3.77 billion in revenue last year.

The announcement of Technip's approach to CGG comes just days after Halliburton Co. of the U.S. unveiled plans to buy smaller rival Baker Hughes Inc. in a deal valued at $34.6 billion, prompting speculation that more deals in the sector were in the offing.

The industry's main competitors are rushing to buy smaller rivals to offset the effects of falling oil prices on their business. Oil-services companies typically provide equipment such as rigs, drill parts and tools, but can also undertake the engineering and construction for pipelines and projects.

As oil prices have fallen to below $80 a barrel from more than $100 a barrel earlier this year, large oil companies have shelved expansion their plans for multibillion-dollar projects and shed operations with thin profit margins.

Technip provides an array of services, engineering, construction and project management, while CGG focuses on seismic studies and other techniques to help energy companies locate oil and natural-gas reserves. CGG also makes equipment.

The two companies have combined revenue of roughly [euro]13 billion and employ about 50,000 people.

Technip, which said it first approached CGG on Nov. 10, has offered [euro]8.30 a share in cash, a premium of 27% over CGG's closing share price Wednesday.

CGG shares surged 22% to close at [euro]7.95 in Paris on Thursday. Shares in Technip fell 7% to [euro]56.60, also in Paris.

Some analysts questioned the logic of the deal given CGG's relatively weak financial position and declining operating profitability, as well as the absence of significant potential cost savings.

"I don't think, at this point, Technip's shareholders have anything to win," said Jean-Pierre Dmirdjian, an analyst at London-based brokerage house Liberum.

Providers of seismic studies and other exploration services tend to be the first to suffer when oil prices fall, because exploration budgets are often the easiest ones for oil and gas producers to cut.

CGG has posted net losses in four of the past five years, and analysts who follow the company say that a current restructuring plan isn't likely to restore it to profitability until 2016.

Mr. Dmirdjian said he suspects the French government, which has a 7.7% stake in Technip and a 10.6% stake in CGG, would like the tie-up to be completed. "I feel the government is very involved in this operation," he said.

French government spokesman Stéphane Le Foll declined to comment on the merger on Thursday.

Credit: By Inti Landauro and Selina Williams

Subject: Petroleum industry; Acquisitions & mergers; Prices; Energy industry

Location: France United States--US

Company / organization: Name: Technip SA; NAICS: 541330; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 20, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1626118031

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626118031?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Rise on Changing OPEC Expectations; OPEC Meeting Will Reveal Whether Production Will be Cut to Prop Up Prices

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.

ProQuest document link

Abstract:

Multiple banks and consulting firms, including Bank of America Merrill Lynch, JBC Energy, Eurasia Group and Simmons & Co. International, said Tuesday that the cartel is most likely to either reinforce its existing quota or cut the quota by one million barrels a day or less.

Links: 360 Link to Full Text

Full text:

Oil prices gained Thursday, snapping a three-day losing streak, on expectations that the Organization of the Petroleum Exporting Countries would take action at its meeting next week to stop prices from falling.

Oil prices have plunged about 30% since mid-June on concerns about ample global supplies and tepid demand growth.

OPEC, which controls about one third of global production, has acted in the past to cut output to keep prices high. However, traders have grown skeptical in recent months that the group, especially top exporter Saudi Arabia, will reduce production at its Nov. 27 meeting.

More analysts are now calling for a small cut or a stronger commitment to complying with the current quota, since the group's production currently exceeds its quota of 30 million barrels a day.

Light, sweet crude for December delivery settled up $1, or 1.3%, at $75.58 a barrel on the New York Mercantile Exchange. The December contract expired at settlement Thursday. The more-actively traded January contract rose $1.35, or 1.8%, to $75.85 a barrel.

Brent, the global benchmark, rose $1.23, or 1.6%, to $79.33 a barrel on ICE Futures Europe.

"People are keeping a wary eye on this meeting next week," said Gene McGillian, senior analyst at Tradition Energy. "Without a production cut from OPEC, I think the market probably will grind a little lower still."

Traders may also be hesitant to take large positions ahead of next week, said Donald Morton, senior vice president at Herbert J. Sims & Co.

Iran and six world powers are seeking a nuclear agreement that would, over time, lift international sanctions on Iran, but a deal may prove elusive before the Nov. 24 deadline. Also, the OPEC meeting coincides with Thanksgiving, when U.S. traders will be on vacation.

"I do think there are people...taking money off the table here, if for nothing else, just to enjoy the long holiday weekend," Mr. Morton said. "The bets have all been taken."

December reformulated gasoline blendstock, or RBOB, fell 1.62 cents, or 0.8%, to $2.0276 a gallon.

December diesel gained 2.1 cents, or 0.9%, to $2.38 a gallon.

Credit: By Nicole Friedman

Subject: Crude oil prices; Petroleum industry; Meetings

Location: Saudi Arabia

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Eurasia Group; NAICS: 523930; Name: Bank of America Merrill Lynch; NAICS: 522110, 551111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 20, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1626136476

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626136476?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

U.S. Stocks Inch Higher to Records; Rebound in Oil Prices Boosts Energy Shares

Author: Scaggs, Alexandra

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.

ProQuest document link

Abstract:

U.S. stocks have hit a series of record highs in recent weeks, boosted by improving economic data, upbeat corporate earnings and stimulus efforts in Europe and Japan. Paul Ebner, who helps manage the BlackRock Global Long/Short Equity Fund, expects European exporters to get a boost from a weaker euro, as the European Central Bank works to prop up the region's economy.

Links: 360 Link to Full Text

Full text:

U.S. stocks rose to record highs Thursday, as a rebound in oil prices sparked gains in energy stocks.

The Dow Jones Industrial Average rose 33.27 points, or 0.2%, to 17719.00. The S&P 500 advanced 4.03 points, or 0.2%, to 2052.75, and the Nasdaq Composite rose 26.16 points, or 0.6%, to 4701.87.

U.S. stocks have hit a series of record highs in recent weeks, boosted by improving economic data, upbeat corporate earnings and stimulus efforts in Europe and Japan. For the year, the Dow has ended at 27 records and the S&P 500 has hit 44 closing highs.

A handful of upbeat economic data points and earnings reports prompted Thursday's advance. The rise was led by energy stocks and small-cap shares, which have lagged behind the S&P 500 so far this year.

"It's nice to see different sectors rising to the top today," said Michael Antonelli, a sales trader at Robert W. Baird. That indicates "the market trend is going to continue."

The small-stock Russell 2000 Index jumped 1.1%. The index is up only 0.6% for the year, while the large-cap S&P 500 has advanced 11%.

Energy stocks posted the biggest gains in the S&P 500, rising 1.1%. The advance followed , which has dropped sharply since this summer, leaving energy stocks down 2.1% for the year. In recent sessions, oil prices have swung on changing expectations for a meeting of the Organization of the Petroleum Exporting Countries next week. Crude-oil futures rose 1.3% to settle at $75.58 a barrel.

Fund managers have been taking a hard look at energy stocks during the recent steep decline in oil, trying to determine which companies will remain profitable if prices stay low. Sandy Villere III, a portfolio manager at Villere & Co., has been sticking with his favorite names, like Sanchez Energy Corp.

"You can buy energy stocks, but they'd better be the very best," said Mr. Villere, whose New Orleans, La.-based firm manages $3.4 billion.

Consumer discretionary stocks rose as well, after a strong reading on the housing market and a handful of upbeat earnings reports.

Home builder stocks rose on news that existing-home sales made a surprise jump of 1.5% in October. The iShares U.S. Home Construction exchange-traded fund, which tracks home builders, gained 1.7%.

Shares of retailers were buoyed by a trio of upbeat earnings reports.

Best Buy Co. rallied 7% after reporting third-quarter results that beat analysts' expectations.

Williams-Sonoma Inc. rose 8.4% on a strong quarterly report, driven by housing-market strength and growth in e-commerce.

Discount retailer Dollar Tree Inc. jumped 5.2% after it reported its strongest quarterly sales growth at existing stores since 2011 and raised its outlook for the year.

Stocks also got a boost from news that a survey of mid-Atlantic manufacturing activity surged to its highest level since December 1993. The Federal Reserve Bank of Philadelphia reported that its index jumped to 40.8 in November from 20.7 the previous month, while economists had forecast a dip to 18.0.

"There's demand out there," said Tom Stringfellow, chief investment officer of Frost Investment Advisors, which manages $10 billion, referring to the U.S. economy. "That continues to underpin [gains in] the market."

Mr. Stringfellow said that his firm was bullish on home-improvement retailers, and he expects the U.S. housing market to continue to improve.

Declines in Europe weighed on U.S. stocks in early trading. European stocks fell after a survey on manufacturing and services activity indicated that eurozone growth will remain weak in the fourth quarter. Markit's composite purchasing managers index fell to 51.4 in November from 52.1 in October. November's level marked a 16-month low, but indicated that activity was increasing. The Stoxx Europe 600 fell 0.3%.

But some investors have been picking up stocks in Europe. Paul Ebner, who helps manage the BlackRock Global Long/Short Equity Fund, expects European exporters to get a boost from a weaker euro, as the European Central Bank works to prop up the region's economy.

"The EU continues to have...loose monetary policy," said Mr. Ebner, whose fund manages $1.6 billion. "That's going to take some pressure off the exporters."

U.S. Treasury prices rose, sending the yield on the 10-year Treasury note down to 2.333%.

In commodity markets, gold futures slipped 0.2% to $1190.70 an ounce.

Write to Alexandra Scaggs at

Credit: By Alexandra Scaggs

Subject: Investment advisors; Stock exchanges; Purchasing managers index; Crude oil prices

Location: United States--US

Company / organization: Name: Williams-Sonoma Inc; NAICS: 442299, 454111; Name: Sanchez Energy Corp; NAICS: 211111; Name: Best Buy Co Inc; NAICS: 443141, 443142

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 20, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Placeof publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1626166983

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626166983?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Advisory Firm Ordered to Pay Exxon Retirees $3.8M

Author: Rieker, Matthias

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.

ProQuest document link

Abstract:

An arbitration panel ordered a Texas advisory firm to pay a group of 19 retired Exxon Mobil Corp. employees a total of $3.8 million for losses from an alleged failed investment strategy designed to protect them from stock-market downturns.

Links: 360 Link to Full Text

Full text:

The retirees invested nearly $40 million with U.S. Capital Advisors LLC of Houston, and contended that they could have made $3 million from the strategy as it was described to them by advisers with the firm. Instead, they lost $1.25 million, according to their arbitration claim with the Financial Industry Regulatory Authority.

The panel awarded them a combined $1.9 million in damages plus interest, along with $852,630 in punitive damages and almost $1 million in legal and other costs, according to the award posted on Finra's website. Individually, the damage awards ranged from $28,294 to $195,949.

Finra arbitrators usually don't explain the reasoning for their decisions but in this case they did, saying they found "egregious, recurrent, and willful violations of a fiduciary relationship" between U.S. Capital Advisors and the investors.

Many of the claimants put money into the strategy at the recommendation of a group of advisers who targeted Exxon Mobil employees nearing retirement with investment seminars. The advisers originally worked for UBS AG, and the clients stayed with them when they left that firm to join newly created U.S. Capital Advisers in 2010.

The "total return" strategy, the investors were told, would hold mainly U.S. stocks and exchange-traded funds in a rising market and move the money into cash when markets fell, with trades triggered by "objective technical indicators," according to the claim. But when the advisers left UBS, their new firm was "understaffed" and "ill-equipped to execute" the strategy, and they strayed from the model, the claim said.

Asked for comment on the award, Patrick Mendenhall, the chief executive of U.S. Capital Advisors, defended his firm. He said the client's claim focused only on the losses from the total return strategy but ignored gains from other investments.

"We are clearly disappointed with the award; we certainly don't understand it," he said.

Thomas Fulkerson, a Houston lawyer who represented the retirees with his partner, Wesley Lotz, said financial advisers can't argue that advisers who make money in one client accounts would have immunity for the losses in other accounts. He said the panel asked for a specific briefing about the argument.

"We are gratified" by the award, he said.

Credit: By Matthias Rieker

Subject: Owner operator; Advisors; Investments

Location: Texas United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Financial Industry Regulatory Authority Inc; NAICS: 926150; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 20, 2014

Section: Wealth Management Journal

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1626366854

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626366854?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

China Opens Up on Oil Reserves; No Disclosures Made on Second and Third Phases of Stockpile

Author: Spegele, Brian

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Nov 2014: n/a.

ProQuest document link

Abstract:

BEIJING--China is lifting some of the secrecy around its stockpiling of oil reserves, as it disclosed for the first time that the first phase of its strategic petroleum reserves contains about 91 million barrels.

Links: 360 Link to Full Text

Full text:

The disclosure on Thursday follows a pledge by President Xi Jinping to provide regular updates on the size of its emergency stockpile.

China's National Bureau of Statistics said that phase one of its strategic petroleum reserves contained 12.43 million metric tons of oil, or about 91 million barrels, across four sites. The statement didn't disclose the size of its second or third phases of reserves. By contrast, the U.S. strategic petroleum reserve has a capacity of 727 million barrels.

China consumes about 10 million barrels a day.

China intends to construct facilities that can hold up to 500 million barrels of oil by 2020, according to the U.S. Energy Information Administration. In addition to strategic government stockpiles, Chinese companies have also been building commercial stockpiles to hedge against price swings. State-owned Chinese oil companies have between 250 million and 400 million barrels of commercial storage capacity, according to the EIA.

The U.S. government has been a vocal supporter of China's effort. Senior U.S. officials have said they are offering guidance to China on collecting and reporting oil-inventory data, and believe that greater transparency on the reserves of a major oil consumer like China is necessary for traders as well as for market stability.

The state-owned China Daily newspaper quoted Mr. Xi as saying earlier this week during a gathering of leaders of the Group of 20 major economies in Australia that China would release oil-reserve data in a more complete and timely manner.

Write to Brian Spegele at

Credit: By Brian Spegele

Subject: Oil reserves; Strategic petroleum reserve; Petroleum industry; Energy policy

Location: China United States--US

People: Xi Jinping

Company / organization: Name: China Daily; NAICS: 511110; Name: Group of Twenty; NAICS: 926110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 21, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1626434502

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626434502?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Higher on China's Surprise Rate Cut; Investors Waiting to See If OPEC Cuts Output to Prop Up Prices at Meeting Next Week

Author: Puko, Timothy; Werber, Cassie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Nov 2014: n/a.

ProQuest document link

Abstract:

With lower interest rates, the Chinese could spend freely enough to support 100,000 barrels of oil demand growth in 2015 in a best-case scenario, he said.

Links: 360 Link to Full Text

Full text:

NEW YORK--Oil prices held on to small gains Friday, after an early rally was sparked by China's decision to cut interest rates, fanning hopes for increasing demand from the world's second-largest crude consumer.

The move came after oil prices had fallen 30% since June on worries about global production outpacing demand, and a growing expectation that the Organization of the Petroleum Exporting Countries will decided to curb production when the cartel meets next week.

A stimulus for the Chinese economy is something that gets macroeconomic investors to buy all kinds of commodities, oil included, said Andrew Lebow, senior vice president for energy derivatives at Jefferies Bache LLC. With lower interest rates, the Chinese could spend freely enough to support 100,000 barrels of oil demand growth in 2015 in a best-case scenario, he said.

"No question I think the market was excited today," Mr. Lebow said. "The Chinese news probably helped to support that rally" that started Thursday in connection with the OPEC meeting.

Light, sweet crude for January delivery settled up 66 cents, or 0.9%, at $76.51 a barrel on the New York Mercantile Exchange. It is the highest closing price since Nov. 12 and helped Nymex crude have its first week of gains since September.

Brent, the global benchmark, rose $1.03 cents, or 1.3%, to $80.36 a barrel on ICE Futures Europe. That was also Brent's highest closing price since Nov. 12 and produced its biggest weekly percentage gains since the week that ended June 20.

The unexpected move by the People's Bank of China was seen as a response to weaker economic activity in the giant Asian economy, which is second to the U.S. in terms of oil consumption. The central bank cut its benchmark one-year loan rate by 0.4 percentage point and its one-year deposit rate by a quarter of a percentage point. It also gave banks greater flexibility in setting deposit rates.

Friday's gains in the crude market were small but put Brent above $80 a barrel for the first time this week.

Brokerage PVM said Iran is also playing a role in the rally. It said talks over the Persian nation's nuclear-power program with a U.S.-led alliance were unlikely to be concluded by Monday's deadline, allaying fears that Iranian oil could soon flood back into the market.

Iran has been hit with several rounds of sanctions, which have heavily affected the Islamic republic's ability to export oil since 2011. Markets have feared that if a deal were struck, Iran might quickly resume selling oil, adding to international markets that are already heavy with supplies.

The market was due for a bounce, but bigger moves are likely next week, said Kyle Cooper, managing director of research for $15 million hedge fund Cypress Energy in Houston. Many traders are waiting for news from the OPEC meeting. Others had to jump on the Chinese economic news and buy back in to cover short-selling bets that oil prices would fall, said Peter Donovan, energy broker for Liquidity Energy in New York.

"There's some nervousness in the curve here," Mr. Donovan added. "Whatever comes out of that OPEC meeting will supersede expectations that guys put in the market today."

December reformulated gasoline blendstock, or RBOB, gained 2.89 cents, or 1.4%, to $2.0565 a gallon.

December diesel gained 2.45 cents, or 1%, to $2.4045 a gallon.

Write to Tim Puko at and Cassie Werber at

Credit: By Timothy Puko And Cassie Werber

Subject: Crude oil prices; Petroleum industry; Interest rates; Meetings

Location: China Iran

Company / organization: Name: Peoples Bank of China; NAICS: 521110; Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 21, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627089365

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627089365?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Boom Returns to U.S. Gulf After Deepwater Horizon Disaster; Exxon, Shell--Even BP--Push Ahead With Giant Offshore Projects

Author: Gilbert, Daniel; Harder, Amy; Scheck, Justin

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Nov 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

ABOARD THE OLYMPUS PLATFORM, Gulf of Mexico--Four years after the Deepwater Horizon disaster, giant new oil projects are returning to the Gulf--bigger and more expensive than ever.

This platform, owned by Royal Dutch Shell PLC, is a floating hive of human activity, 130 miles off the Louisiana coast. Larger than a New York City block and weighing more than an aircraft carrier, Olympus is among roughly a dozen new multibillion-dollar platforms that are or will be pumping oil in the deep waters of the Gulf by the end of next year.

The resurgence could be short-lived if the decline in crude-oil prices, down about 30% since June, continues and prompts companies to delay substantial investments in the Gulf.

For the near term, though, the activity promises to return the Gulf to prominence as a major source of U.S. energy. In 2001, the waters produced about a quarter of all American oil and gas. Since then, production has fallen by half as wells petered out and the government issued fewer permits in the aftermath of the 2010 Deepwater Horizon explosion and oil spill. Last year, the Gulf accounted for less than 10% of the country's energy production, in part because of soaring output from wells drilled in onshore shale formations.

The new projects here, from such companies as Hess Corp., Exxon Mobil Corp. and Chevron Corp., have the combined capacity to pump about 900,000 barrels a day--more than the oil and gas output of California. And that doesn't include supplies from two projects led by BP PLC, which declined to provide details on output.

Costs here have been jumping, in part because companies are drilling farther from shore and in deeper waters. Deep-water wells are up to 25% more expensive today than in 2010, according to Shell and Chevron, and can cost $300 million each. New regulations have prompted companies to add safety features such as an extra stack of valves designed to stop an out-of-control well. The failure of such a device was a cause of the Deepwater Horizon disaster.

Drilling the average deep-water well takes 13% longer than it did before the 2010 disaster, according to research firm Kessler Energy LLC, partly because rigs are idle longer for inspections and maintenance. Offshore drillers also must compete for skilled hands who can find jobs closer to home in shale fields, where the workers don't have to spend weeks away from their families.

"There are fewer projects moving forward as a result, or they're moving more slowly than they otherwise would," Robert Kessler, the research firm's chief executive, says regarding higher costs.

So while new projects under way will push energy production in the Gulf's deep waters to a record 1.9 million barrels a day in 2016, analysts at Wood Mackenzie forecast, growth is likely to stall afterward because of high costs and technological limitations.

"The current slide in oil prices does not help the long-term outlook, either, especially if the downward trend continues for a prolonged period," says Imran Khan, an analyst at the energy research firm.

Executives say that there will be great demand for fuels pumped from oil fields off the coasts of Louisiana and Texas. Costs aside, "the projects are robust, even under these conditions," John Hollowell, a Shell executive vice president, says aboard the Olympus platform.

Hess said Monday that it had started pumping crude from its deep-water Tubular Bells installation about 135 miles southeast of New Orleans. Exxon Mobil and Anadarko Petroleum Corp. plan to start up two more major Gulf projects in the coming months. Hess, Chevron and other partners recently gave the green light for a $6 billion development in the Gulf, even though U.S. oil prices are below $80 a barrel at a four-year low.

Even BP has returned to making big offshore bets. The company, which pleaded guilty to criminal charges and has taken a $43 billion hit related to the Deepwater Horizon explosion and oil spill, is developing technology to drill at greater depths. It said last year that it planned to spend $4 billion a year in the Gulf for the next decade and said recently that it was continuing its "multibillion-dollar investment program."

For big energy companies, exploring the Gulf's waters is attractive compared with other parts of the world. Many petroleum-rich nations from the Middle East to Latin America limit the amount of profit that energy companies can make. Deep-water wells are also more prolific than shale wells, making it easier for the biggest companies to sustain their output.

Unlike many projects that Shell and other oil companies have developed in recent years, the Olympus platform came online ahead of schedule and under budget. It began tapping oil and gas in February. The company decided to build Olympus in 2010, just months after the Deepwater Horizon exploded, as a way to get more oil and gas from a field that the company had pumped for decades.

To bring down costs for the project, Shell used components made from polyethylene, a corrosion-resistant material that is less expensive than what Shell had used, according to RMB Products Inc., which made the new parts.

Today Olympus sits in 3,000 feet of water and can process up to 100,000 barrels a day of oil, or roughly 3% of Shell's current global production.

Now Shell is aiming for an even more remote prize. The company is working on a new Gulf project that will tap an oil field under 9,500 feet of water--three times deeper than Olympus.

Write to Daniel Gilbert at , Amy Harder at and Justin Scheck at

Credit: By Daniel Gilbert, Amy Harder and Justin Scheck

Subject: Oil spills; Petroleum industry; Energy policy; Costs

Location: New York United States--US California Louisiana

Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210

Publication title: Wall Street Jou rnal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 21, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627152303

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627152303?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Boom Returns To Gulf After Spill

Author: Gilbert, Daniel; Harder, Amy; Scheck, Justin

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Nov 2014: B.1.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

ABOARD THE OLYMPUS PLATFORM, Gulf of Mexico -- Four years after the Deepwater Horizon disaster, giant new oil projects are returning to the Gulf -- bigger and more expensive than ever.

The resurgence could be short-lived if the decline in crude-oil prices, down about 30% since June, continues and prompts companies to delay substantial investments in the Gulf.

Last year, the Gulf accounted for less than 10% of the country's energy production, in part because of soaring output from wells drilled in onshore shale formations.

The new projects here, from such companies as Hess Corp., Exxon Mobil Corp. and Chevron Corp., have the combined capacity to pump about 900,000 barrels a day -- more than the oil and gas output of California. And that doesn't include supplies from two projects led by BP PLC, which declined to provide details on output.

But costs have been jumping, in part because companies are drilling farther from shore and in deeper waters. Deep-water wells are up to 25% more expensive today than in 2010, according to Shell and Chevron, and can cost $300 million each. New regulations have prompted companies to add safety features such as an extra stack of valves designed to stop an out-of-control well. The failure of such a device was a cause of the Deepwater Horizon disaster.

"There are fewer projects moving forward as a result, or they're moving more slowly than they otherwise would," Robert Kessler, the research firm's chief executive, says regarding higher costs.

So while new projects under way will push production in the Gulf's deep waters to a record 1.9 million barrels a day in 2016, analysts at Wood Mackenzie forecast, growth is likely to stall afterward because of high costs and technological limitations.

Hess said Monday it had started pumping crude from its deep-water Tubular Bells installation about 135 miles southeast of New Orleans. Exxon Mobil and Anadarko Petroleum Corp. plan to start up two more major Gulf projects in the coming months. Hess, Chevron and other partners recently gave the green light for a $6 billion development in the Gulf, even though U.S. oil prices are below $80 a barrel at a four-year low.

Unlike many projects in recent years, the Olympus platform came online ahead of schedule and under budget. It began tapping oil and gas in February. The company decided to build Olympus in 2010, just months after the Deepwater Horizon exploded, as a way to get more oil and gas from a field that the company had pumped for decades.

Today Olympus sits in 3,000 feet of water and can process up to 100,000 barrels a day of oil, or roughly 3% of Shell's current global production.

Now Shell is aiming for an even more remote prize. The company is working on a project that will tap an oil field under 9,500 feet of water -- three times deeper than Olympus.

Credit: By Daniel Gilbert, Amy Harder and Justin Scheck

Subject: Energy policy; Offshore oil wells; Oil spills; Crude oil prices; Offshore drilling; Petroleum production; Deepwater exploration & production

Location: Middle East United States--US California Louisiana Gulf of Mexico

Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Hess Corp; NAICS: 211111, 324110, 447110; Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: Chevron Corp; NAICS: 211111, 324110; Name: BP PLC; NAICS: 211111, 324110, 447110

Classification: 3100: Capital & debt management; 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.1

Publication year: 2014

Publication date: Nov 22, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627024972

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627024972?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Is It Time for the U.S. to Lift Its Restrictions on Oil Exports? Jason Bordoff on Why It Would Be Smart, Tyson Slocum on Why It Would Be Risky

Author: Anonymous

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Nov 2014: n/a.

ProQuest document link

Abstract:

[...]the U.S. oil price may fall further below the world price. [...]some maintain that oil exports will reduce the incentive for companies to innovate and develop ways to reduce oil use.

Links: 360 Link to Full Text

Full text:

It's a whole new oil world for the U.S.

After decades of declining domestic oil production, the country is in the middle of an unexpected boom. Driven by new technology that reaches previously inaccessible reserves, production has soared by millions of barrels a day. This surge has been a key factor driving oil prices down.

So, should U.S. oil companies be allowed to sell that oil overseas?

Because of a restriction dating back to the oil scares of the 1970s, producers for the most part can't export their oil. The export ban was part of a series of laws passed to ease supply concerns and prevent U.S. producers from skirting price controls by selling crude into the world market at higher prices.

Now there's a growing call to lift that ban, from oil companies and others. The game has fundamentally changed, they argue. Allowing American oil to flow onto the global market will encourage more production, since the fuel will fetch higher prices than it could at home. It will also pump more cash into the U.S. economy and over time may end up driving down the price of gas for Americans.

Opponents say that isn't the case. Lifting the ban, they say, will drive up prices of gas and oil for American industries that depend on them, discourage innovation among energy companies and hurt the environment.

Jason Bordoff, a Columbia University professor and former energy adviser to President Obama, argues in favor of lifting the ban. Tyson Slocum, director of the Energy Program at Public Citizen, makes the case for keeping the ban in place.

Yes: It's Smart For Both Economic and Geopolitical Reasons

By Jason Bordoff

The oil-export ban was put in place to address scarcity concerns and keep U.S. producers from bypassing price controls by selling oil for a higher price abroad. Now, with U.S. output soaring and price controls jettisoned decades ago, it is time to lift that restriction.

Although the magnitude of the benefits is uncertain, allowing U.S. producers to sell into global markets would likely spark more domestic oil production, leading to increased U.S. economic activity, a lower petroleum trade deficit, increased global oil supply and perhaps lower gasoline prices.

Opening the Doors

Currently, many American refineries are set up to handle a different type of oil than we produce domestically. As U.S. supplies continue to grow, producers may increasingly need to discount their price to make it economic for refineries to buy their oil. As a result, the U.S. oil price may fall further below the world price.

Although the U.S. is expected to remain a net importer, allowing companies to export certain types of oil and import others means they can sell into the global market for a higher price than they can fetch domestically. That will spur more U.S. production--and thus reduce net imports.

Critics say keeping oil at home helps protect us from oil-price shocks, but the oil market is global. A disruption anywhere will cause prices to go up in the U.S., whether we export or not.

Nonetheless, cutting net imports means the macroeconomic impact of oil-price increases won't be as severe. Why? More of the increased spending on oil circulates in the U.S. economy instead of flowing overseas. Exports also allow U.S. supply to better respond to global prices and temper supply shocks. Geopolitically, the oil-export ban can undermine U.S. credibility in challenging trade restrictions and promoting open markets elsewhere, while boosting U.S. output could erode OPEC's market share and pricing power.

The Effect on the Pump

Another criticism is that exports will benefit producers but raise pump prices. But a recent Energy Information Administration study showed consumer gasoline prices move with the global oil price, not the domestic price. To the extent that lifting the ban increases U.S. production and overall world supply, it may cause global prices to decline slightly.

Then there is the argument that higher production hurts the environment. It is true that oil and gas development can have environmental impacts, and to the extent that exports boost U.S. supply, lower world oil prices and thus increase oil use, carbon emissions would rise. But trade barriers aren't the appropriate response to environmental concerns. The U.S. is poised to produce vast quantities of oil whether we export or not, which is why adequate environmental regulation is essential along with robust climate policies.

Finally, some maintain that oil exports will reduce the incentive for companies to innovate and develop ways to reduce oil use. But innovation is driven by policy, R&D investments, consumer response to prices and entrepreneurs, universities and national laboratories. Suppressing U.S. oil prices will not spur the breakthroughs we need.

The current statutory restrictions on oil exports are a legacy of a bygone era that doesn't reflect today's energy reality. On economic, security and geopolitical grounds, they should be lifted.

Mr. Bordoff, professor of professional practice in international and public affairs and founding director of Columbia University's Center on Global Energy Policy, previously served as an energy adviser to President Obama. He can be reached at.

No: The U.S. Would Be More Vulnerable To Supply Disruptions

By Tyson Slocum

Removing the export ban is a shortsighted move that will have bad consequences both for consumers and for the economic future of the U.S.

The current oil boom--coupled with flatlining domestic demand--has led to a huge glut that helps insulate the American economy from the uncertainty caused by oil-supply disruptions abroad. Opening exports would remove that protection, which would be disastrous.

Booming domestic production hasn't brought us anywhere near oil independence: The American economy remains addicted to oil, and we remain vulnerable to international supply shocks and punishing price swings. Oil prices have jerked repeatedly since the mid-2000s in response to supply constraints and demand trends. The future will be no less volatile.

The Price at the Pump

What's more, opening exports will make oil and gas much more expensive for Americans. As oil producers head overseas to fetch higher prices than they could get at home, domestic supplies will dry up, and the cost will rise. Oil is literally a fuel for economic activity. To increase the cost of that feedstock would benefit oil extractors at the expense of everyone else.

What about studies projecting that unconstrained crude-oil exports will lower domestic prices rather than raise them? In general, they conclude that exporting oil will raise the key U.S. oil benchmark price (West Texas intermediate, or WTI) but will lower an international benchmark by which some portions of the U.S. gasoline market are priced (Brent).

Following the money, however, one sees that nearly all of these private studies have been funded by companies that benefit from exporting oil. And the studies dismiss the possibility that more U.S. gasoline markets could link to WTI and rise as the U.S. benchmark price rises.

It is true that Brent does price a lot of the gasoline market. But that dynamic is due to historic trends, where much of the U.S. market had to rely on imports and was exposed to Brent pricing. The recent glut in domestic oil can change this dynamic and potentially send gasoline prices lower. But if we allow exports, that glut will disappear.

Some supporters of exporting also say we need to allow exports to achieve credibility in trade talks. But crude oil has long been exempt from trade negotiations, so the ban is a nonfactor.

True Economic Strength

There's a broader point here. We must learn from Nigeria, Russia and Venezuela that an economy that prioritizes raw natural-resource exports fails to properly develop true engines of prosperity. The strength of the U.S. economy will be in the development of a strong technology sector--which is at odds with a strategy to export crude oil.

Any informed observer of energy markets recognizes the real revolution is in clean-tech technology. Discarding the export ban would boost prices and dull the incentive to use oil as an industrial feedstock, including for photovoltaic cells, wind turbines and advanced batteries.

Then there is the environment. As with any extractive industry, the impacts of fracking on precious resources will be exacerbated by the increase in fracking should the ban be lifted.

The real issue: One segment of the economy--the oil industry--is waging a campaign to convince a skeptical public that an economic-protection statute is no longer needed and Americans will be better off shipping our crude directly to China. Domestic oil should be used domestically.

Mr. Slocum is director of the Energy Program at Public Citizen. He can be reached at.

Subject: Petroleum refineries; Exports; Petroleum industry; Energy policy; International trade; Wage & price controls; Trade restrictions; Petroleum production; Gasoline prices; Energy industry

Location: United States--US

People: Obama, Barack

Company / organization: Name: Columbia University; NAICS: 611310; Name: Public Citizen; NAICS: 541820, 541910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 23, 2014

Section: Special

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627154546

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154546?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Where Is U.S. Energy Policy Heading Over the Next Two Years? Two Policy Advocates Debate the China Accord, the Likelihood of Gridlock and the Ban on Oil Exports

Author: Harder, Amy

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Nov 2014: n/a.

ProQuest document link

Abstract:

[...]next year the U.S. will be one step closer to achieving the significant carbon pollution reductions we need to avert dangerous climate change. [...]China is expected to add the equivalent of the entire current U.S. coal fleet over the next decade.

Links: 360 Link to Full Text

Full text:

Next year's Republican-controlled Senate is expected to come out strongly against President Barack Obama's most consequential policies aimed at reducing the effects of climate change.

The GOP-controlled House already has spent the past few years passing legislation curtailing Environmental Protection Agency regulations. Now the Senate's next majority leader, Mitch McConnell of Kentucky, is poised to put the upper chamber in lock step with the House on infrastructure and energy-efficiency bills as well.

To get a sense of where energy and environmental policy might be headed in the next Congress, The Wall Street Journal reached out to policy advocates on opposite sides of the political fence: Alison Cassady, director of domestic energy policy at the Center for American Progress and a former aide to House Energy and Commerce Committee ranking member Henry Waxman (D., Calif.); and George David Banks, senior fellow at the R Street Institute and former Republican deputy staff director for U.S. Senate Environment and Public Works Committee ranking member James Inhofe (R., Okla.). Here are edited excerpts.

The China Card

WSJ: Will the Republican-controlled Congress be able to roll back or stop the EPA? And how does the recent climate-change deal announced with China affect the debate?

MS. CASSADY: In 2015, the EPA will finalize the first carbon pollution standards for U.S. power plants. Congressional leadership will try to block these standards, but they will not succeed. As a result, next year the U.S. will be one step closer to achieving the significant carbon pollution reductions we need to avert dangerous climate change.

Republicans in Congress have made many claims about the president's Climate Action Plan, but two stand out in light of the U.S.-China announcement. First, they have argued that the emissions reductions achieved by the president's policies are inconsequential on the global scale. Second, they have argued that the U.S. should not act because China never will.

The U.S.-China agreement shows just how misplaced these claims are. President Obama's policies to cut carbon pollution from vehicles and power plants have leveraged a major commitment to act from the Chinese. In turn, this unprecedented leadership from the U.S. and China will bring more countries to the table to make similar commitments. The president's policies provided the catalyst for this major foreign-policy success. Republican attacks on this success will only hurt our standing in the world.

MR. BANKS: In Congress, the GOP will adopt messaging bills and Congressional Review Acts on key regulations that the president will veto. At the same time, Republicans will slow or chip away at the White House's climate policies via focused appropriation plays attached to must-pass bills. Beijing's agreement that it intends to cap emissions by 2030 will heighten "leakage" concerns that U.S. emissions (and jobs) will continue to be transferred to China, thus strengthening the argument that EPA action does not produce any real climate mitigation benefits.

China essentially "agreed" to do what it already intends to do. Thus, there was no real "deal."

China remains on track to reach a greenhouse-gas emissions level by 2017 that is double the U.S. level. In fact, China is expected to add the equivalent of the entire current U.S. coal fleet over the next decade. That translates into a new 600-megawatt coal plant every 10 days. At the same time, the U.S. plans to shutter a large percentage of its coal fleet, reducing a key source of affordable and reliable electricity. If that were a deal, it would be a lousy one, and Republicans know that.

End of Gridlock?

WSJ: Will this election lead to more bipartisanship? Will there be unique opportunity for bipartisanship on energy and environmental policy?

MS. CASSADY: On energy policy, bipartisan progress will depend in large part on whether the Senate and House Republican leadership can moderate their respective caucuses.

Sen. McConnell and Rep. John Boehner [House speaker] have promised to bring up bills that passed the House with bipartisan support in the 113th Congress. On its face, this may sound like a reasonable approach. But in reality, they would be catering to the most hard-line members of their party. The Republican-led House has amassed a remarkable anti-environmental track record that stands in stark contrast to Americans' support for environmental stewardship.

MR. BANKS: With the president expressing little interest in working with Congress, we should not expect to see significant bipartisanship on most controversial issues. The president's carbon plans, for example, rely solely on using existing executive-branch authority under the Clean Air Act to achieve emissions reductions. Republicans are counting on the courts to eventually reject related EPA proposals, in part or in their entirety.

One wild card on the climate-change front is the potential for extreme weather events this winter. We came dangerously close to a grid failure last January during the polar vortex. If part of the grid fails (i.e., millions of people go without electricity) because of the absence of coal plants that were shuttered because of EPA regulations, the president's go-it-alone approach could face major criticism. Democrats who have often used extreme weather events to promote action on climate change may find the tables turned by Republican arguments that unreasonable climate and environmental policies resulted in actual harm to the American people.

MS. CASSADY: Climate change is the perfect example of where Republicans need to moderate the most insurgent members of their caucus. House Republicans have voted to block funding for climate science while saying the scientific record isn't complete. They have voted to block funding for international outreach on climate change while decrying unilateral action. They even voted to deny the reality of climate change, even though the scientific consensus is clear.

If Republicans want to engage the president on climate change, they first need to acknowledge that climate change is a serious problem that demands an urgent response.

Keys to Keystone

WSJ: How do the election and the failed vote on Nov. 18 change the dynamics on the Keystone XL pipeline? Senate Republicans say they have the 60 votes needed to pass it, but will Mr. Obama veto or sign a bill that approves Keystone?

MR. BANKS: It's unfortunate that Sen. Mary Landrieu's effort failed by only one vote. A recent Huffington Post poll indicated that 56% of Americans support the pipeline. Of course, Republicans will try again next year. Four of the Landrieu "no" votes will be replaced with Republicans, thus the GOP has a solid chance of reaching the 60-vote threshold, as long as no more than three Democrats abandon their "yes" position. We should not expect the magic [veto-proof] number of 67 to be reached, given the symbolism of the pipeline to climate alarmism. The president will therefore maintain leverage with the veto threat.

Regardless, the Congress may send a bill to the president as a stand-alone. Given the number of bills that he will feel forced to oppose--chiefly those aimed at stopping the climate agenda--the White House should choose when best to exercise the veto, particularly given the level of public support for the project. Most Americans do not view Keystone as an environmental threat, backed by a State Department assessment that the pipeline only produces negligible greenhouse-gas emissions. If the president does veto it, Congress will attach the pipeline approval to a must-pass bill that he cannot veto.

MS. CASSADY: The world's climate scientists are sounding alarms about the urgent need to decarbonize our energy system and are warning against locking in new high-carbon infrastructure like Keystone XL. The most recent report from the Intergovernmental Panel on Climate Change says we have to eliminate fossil-fuel use by the end of the century to avoid catastrophic warming. In that context, arguments against doubling down on Canadian tar sands have even greater resonance. Keystone XL will ensure and expedite the development of the dirtiest fossil fuel on the planet. Moreover, the state of Nebraska still has not finalized a pipeline route that satisfies concerns of ranchers and property owners.

The president has reiterated his commitment to the current review process, which allows him to consider the costs and benefits of the pipeline for the American people. The question for Keystone XL proponents is one the oil industry and other energy interests will face often in 2015: Are they willing to moderate their hard-line position that disregards climate change and other environmental concerns?

Outlook for Oil Exports

WSJ: The oil industry is lobbying Congress to relax the decades-old ban on oil exports, while the White House studies the upshots of the U.S. oil boom. What do you think Congress will do on this issue? Do you think the Obama administration will change its policy?

MR. BANKS: It is highly likely that the ban on crude-oil exports will be lifted by this Congress with White House support. Our reduced dependence on oil imports--resulting from increased domestic oil production and transportation-fuel efficiency improvements--has made the ban much more difficult to defend. Moreover, the ban and its exceptions could very well be inconsistent with U.S. trade obligations, as pointed out by a number of studies.

WSJ: What do you think Congress and the president will do about the ban on oil exports?

MR. BANKS: It is highly likely that the ban on crude-oil exports will be lifted by this Congress with White House support. Our reduced dependence on oil imports--resulting from increased domestic oil production and transportation-fuel efficiency improvements--has made the ban much more difficult to defend. Of course, wild cards exist. An oil supply shock in the Middle East, for example, would complicate a shift in policy, despite the global market's increased need for U.S. oil.

MS. CASSADY: If you listen to proponents of lifting the ban, you'd believe that we produce more oil than we need. In fact, the U.S. remains dependent on foreign oil to meet our needs. In that context, members of Congress and the public will have to evaluate whether it makes sense to start shipping more oil overseas. Congress should proceed cautiously and hold meaningful, thorough hearings on the potential consumer and environmental impacts of lifting the ban.

Ms. Harder is a staff reporter in The Wall Street Journal's Washington bureau. Email her at .

Credit: By Amy Harder

Subject: Environmental policy; Emissions; Energy policy; Environmental protection; Climate change

Location: China United States--US

People: McConnell, Mitch Banks, George David Waxman, Henry A

Company / organization: Name: Congress; NAICS: 921120; Name: Republican Party; NAICS: 813940; Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Center for American Progress; NAICS: 813940, 541720

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 23, 2014

Section: Special

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627154593

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154593?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Weatherford Must First Weather Oil-Services Storm; Merger of Halliburton, Baker Hughes Would Shift Playing Field

Author: Denning, Liam

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Nov 2014: n/a.

ProQuest document link

Abstract:

[...]Weatherford may get to participate in more projects as oil majors seek to preserve competition when selecting contractors. A sustained drop in oil prices would also blunt Weatherford's efforts to expand margins and free cash flow, a major plank in Wall Street's buy case for the stock.

Links: 360 Link to Full Text

Full text:

Make no mistake, Halliburton's bid for Baker Hughes isn't a good sign for the oil-field-services sector. Sure, assuming it gets approved, such consolidation bodes well for the long term. But for now, the signal is that Baker Hughes, especially, wasn't banking on a rebound in oil prices soon.

Which brings up two rivals: Schlumberger and Weatherford International. In theory, both should reap some benefit from this deal. Schlumberger can potentially sharpen its competitive edge in the near term as Halliburton and Baker Hughes are distracted by what will likely be a long regulatory review and integration process.

In the longer term, Schlumberger would face a more formidable rival. Still, tenders for big international projects would now have two very large oil-services firms competing for them, not three. That tends to support "rational pricing," as Wall Street euphemistically puts it.

The latter point may pertain even more to Weatherford. It is the smallest of the big four firms. Its market share in technology-intensive services of less than 10%, according to Morgan Stanley's Ole Slorer, is about one-third that of Schlumberger or a merged Halliburton-Baker Hughes.

Weatherford might gain in two ways: First, Halliburton will likely have to sell businesses to gain regulatory approval, which Weatherford could buy. Second, Weatherford may get to participate in more projects as oil majors seek to preserve competition when selecting contractors.

Yet focusing on the details of how Halliburton's bid reshapes the sector risks missing its wider context: that weaker oil-price outlook. There is a valley to be traversed before reaching the sunny uplands of "rational pricing."

That suggests owning any oil-services stock at this point is risky. Usual metrics such as price/earnings multiples become treacherous as forecast revisions lag behind movements in the oil price.

Jeff Tillery at Tudor, Pickering, Holt suggests using price-to-book valuations, which offer more of a sense of where the floor in valuations might be in a down cycle.

On that basis, the floor looks a ways off. Even if oil isn't poised for a 2008-style crash, there have been other scares in recent years in which book multiples have fallen. The minimum that Weatherford reached from 2010 to 2013 was 0.87 times book. Today, it trades at 1.62 times. That potential drop of 46% is the widest of the big four.

A big factor weighing on Weatherford is its net debt. Using management's guidance and current consensus profit forecasts, this should end the year still north of two times earnings before interest, taxes, depreciation and amortization, or Ebitda. All of the others are below one times Ebitda.

A sustained drop in oil prices would also blunt Weatherford's efforts to expand margins and free cash flow, a major plank in Wall Street's buy case for the stock. The debt burden could also hamper efforts to acquire assets falling out of the Halliburton-Baker Hughes deal.

Halliburton also faces sizable downside risk on a price/book basis and, because it wants to use its stock to pay for most of its proposed deal, so does Baker Hughes.

The company with the least room to fall, relative to its recent trough multiple, is Schlumberger. It is just a fifth below today's level. At 3.1 times book, the stock certainly couldn't be called cheap. Resilience, however, is likely to command a relative premium in coming months.

Write to Liam Denning at

Credit: By Liam Denning

Subject: Oil service industry; Regulatory approval

Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Weatherford International Inc; NAICS: 213112, 333132

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 23, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627154634

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154634?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Oil-Rich Nations May Cut Spending

Author: Fitch, Asa

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Nov 2014: C.8.

ProQuest document link

Abstract:

Government spending by the Middle East's oil exporters jumped above $700 billion in 2011 and grew by about 15% annually until this year, when estimates show the rate of increase slowing, according to the Institute of International Finance "If revenues are not forthcoming, something has to give," said John Sfakianakis, the Middle East regional director for Ashmore, a U.K.-based emerging-market asset manager.

Links: 360 Link to Full Text

Full text:

Lower oil prices are threatening to curtail the spending that energy-rich Persian Gulf governments have used to shore up support since the Arab Spring.

A continuing decline in prices could curb foreign-asset purchases by the governments of Bahrain, Oman, Saudi Arabia, United Arab Emirates, Qatar and Kuwait and put a drag on the post-Arab-Spring construction growth that has benefited multinational contractors.

Such a reconsideration could have implications for global asset markets, for regional politics and for the pace of a development boom into which governments have pumped hundreds of billions of dollars and from which many foreign companies have profited.

Leaders in the Gulf have begun talking more openly about spending adjustments and economic diversification away from energy.

Oman's minister of oil and gas, Mohammed al Rumhi, said this month that the price decline is "a challenge, because the country depends on oil," according to the Muscat Daily. "Oil prices going down will affect the state budget," he said.

High oil prices have helped Gulf governments in their attempt to head off the kind of unrest that toppled regimes in Tunisia and Egypt in 2011. To keep their citizens content, the royal-family hegemonies used their energy-fueled fiscal muscle to start building schools, hospitals, housing for citizens, roads and other social projects.

"If revenues are not forthcoming, something has to give," said John Sfakianakis, the Middle East regional director for Ashmore, a U.K.-based emerging-market asset manager. "Eventually some of these huge projects will have to slow down."

If oil prices, which have dropped to below $80 a barrel from more than $100 a barrel in July, continue to stay low, this slowdown could persist.

The scale of the coming budget problem is biggest in Saudi Arabia, the Gulf's leading economy. Saudi Arabia spent $265 billion last year, according to International Monetary Fund estimates. If it doesn't alter fiscal policy, it is on pace to run a budget deficit amounting to 1.4% of economic output next year, despite its enormous wealth.

Saudi Arabia needs oil to trade at about $97.50 a barrel this year to sustain its spending without running a deficit or tapping reserves, according to the IMF.

Oil prices fell below Saudi's break-even budget level in July and have remained below it since. The break-even levels for the Gulf countries apart from Qatar and Kuwait are already above current oil prices.

Light, sweet crude futures settled at $76.51 in New York on Friday. Brent crude, the leading European oil benchmark, traded at an average of around $110 a barrel between 2011 and 2013.

Spending also has ballooned in the U.A.E., where Abu Dhabi pledged last year to build $90 billion of projects through 2017 -- many of them with the help of foreign companies. Bahrain, Qatar, Oman and to a lesser extent Kuwait have been on spending sprees, too.

The Gulf's big energy exporters, including Saudi Arabia, Kuwait, the U.A.E. and Qatar, could try to fight the decline in oil prices.

As some of the most influential members of the Organization of the Petroleum Exporting Countries, the cartel of big oil producers, they could agree to cut output in a bid to buoy prices.

But the group has so far failed to reach any consensus about reining in production, and it is unclear how much impact OPEC would have on prices if it did act.

The countries also could issue debt or tap into government savings if current oil receipts can't pay for planned expenditures, tiding them over while they make budget adjustments.

In the U.A.E., for example, there was "no need now to adjust very quickly to lower revenues" because of the existence of the Abu Dhabi Investment Authority and other sovereign asset pools, said Harald Finger, the head of the IMF's mission to the country.

Still, Gulf countries are reluctant to drain sovereign-wealth funds, together estimated at more than $1 trillion, leaving spending cuts as the only other option outside of borrowing.

Such cuts, however, could endanger spending that has been a boon to foreign companies and investors. U.S. construction company Bechtel Group Inc. and Germany's Siemens AG won contracts to help build a $23.5 billion metro in Riyadh last year, while Royal Dutch Shell PLC signed a deal in 2012 with Qatar Petroleum to build a huge new petrochemicals complex in Qatar.

If Gulf countries do decide to dip into sovereign funds, it could force a pullback by some of the world's most active institutional investors.

Gulf funds have spent billions of dollars in recent years on everything from London real estate to Australian and U.S. infrastructure, and have served as key financial backstops for large Western banks in the throes of the financial crisis. Funds in Abu Dhabi and Qatar helped rescue Citigroup Inc. and Barclays PLC in 2007 and 2008.

In an era of greater austerity, funds may still make new investments using dividends and investment gains, but the flow of Gulf money into international markets could be slower.

Credit: By Asa Fitch

Subject: Crude oil; Global economy; Foreign investment

Location: Persian Gulf states

Classification: 9178: Middle East; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.8

Publication year: 2014

Publication date: Nov 24, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627006827

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627006827?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Crude Conflict: Control of Oil Fuels War Between Kurds, Islamic State

Author: Dagher, Sam

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Nov 2014: A.1.

ProQuest document link

Abstract:

The militants use oil money to secure allegiance and support their war, according to interviews with tribal leaders, Islamic State militants and Kurdish military and intelligence officials.

Links: 360 Link to Full Text

Full text:

AL-YAROUBIYAH, Syria -- Plumes of black smoke billow on the horizon of this border town in northeast Syria, a thumb-shaped corner of the country that pokes into neighboring Turkey and Iraq.

The smoke isn't from war, but it rises from the deadly fight over resources between Islamic State and Kurdish fighters. Men, women and children operate thousands of primitive metal kilns to refine crude oil distributed by the warring sides to buy loyalty. Residents sell the fuel they make to black-market traders.

With oil now the only stable income in these impoverished rural communities, each side offers a choice: Fight us and die. Or, join us and earn a living.

The U.S. seeks to expand its support of Kurdish forces fighting Islamic State for control of the towns and villages bound by the Tigris and Euphrates rivers. The Wall Street Journal found the conflict as murky as the sludge that spills from the makeshift kilns onto land grazed and farmed since Biblical times.

As one 27-year-old tribesman said, local Arabs are eager for oil income but most hate the Kurds as much as they fear Islamist militants.

Islamic State controls most of the southern section of Syria's Hasakah province and nearly all of the adjacent Deir Ezzour province, both rich in oil and gas, as well as most of nearby Raqqa province.

For Islamic State, Hasakah province is an integral part of its self-proclaimed caliphate that currently stretches from the outskirts of the northern Syrian city of Aleppo to the fringes of Baghdad, the capital of Iraq.

The militants use oil money to secure allegiance and support their war, according to interviews with tribal leaders, Islamic State militants and Kurdish military and intelligence officials. Sharing profits with tribal elders and their followers also keeps a steady supply of Islamic State recruits, these people said.

The United Nations and some analysts estimate that Islamic State produces roughly 50,000 barrels a day from oil fields it controls. The effect of recent U.S.-led coalition airstrikes against oil facilities used by the Islamist militants is unclear.

A Kurdish paramilitary force claiming more than 30,000 fighters has seized the northern section of Hasakah province and set up a self-rule area that has established courts and passed laws in a bid for permanent autonomy of Kurdish-majority regions in Syria. The force, called the People's Protection Units, or YPG, also controls oil wells and sells crude at a discount to local Arab tribesmen, providing income for both Kurd fighters and local families.

The Kurds produce about 40,000 barrels of crude oil a day from wells they control, according to Kurdish officials here. Some of it is sold to the mostly Arab kiln operators at $15 a barrel, they said.

Eight barrels of crude yields roughly six barrels of gasoline or diesel fuel, which are sold for an average of $40 a barrel, said one kiln operator. There are an estimated 3,000 refining kilns in Kurdish-controlled areas, officials said, all built since the start of Syria's civil war.

Interviews with former Islamic State fighters now held as prisoners by the Kurds, as well as telephone interviews with residents in territory held by Islamic State, reveal similarities in how the two sides run their oil enterprises.

Like the Kurds, Islamic State sells crude oil to kiln and refinery operators at discounted prices: On the world market, the crude might fetch $75-$80 a barrel. And like the Kurds, Islamic State hires local residents to protect and operate the oil fields -- or join its ranks as fighters -- with salaries as high as 100,000 Syrian pounds a month, about $512.

The violence that inflames Islamic State's Sunni Islamist extremists against all other Muslims -- and all other religions -- is focused here instead on control of land, resources, roads and border crossings that yield revenues.

"Material gains are what's driving this war, nobody has principles," said Sheikh Humeidi Daham al-Jarba, a septuagenarian recognized as one of the leaders of Shammar, one of the largest Bedouin tribes in the Middle East.

"For as far as I can remember," he said, "these three provinces never had their own direction, always with the strongest and the power on the ground."

Mr. Jarba, who has joined forces with the Kurds, recently formed a Shammar militia to help fight Islamic State, which lurks as close as 20 miles southwest. In July, he was given the honorary post of governor of the al-Jazeera canton, one of the new Kurdish self-rule areas.

Armed members of Mr. Jarba's new militia, Jaish al-Karama -- "Army of Dignity," in Arabic -- guard the entrance of his gated compound, which has large sofa-lined rooms to host tribal meetings. Many of the guards wear checkered red-and-white kaffiyehs, or head scarves, and leather gun holsters. Fuel tankers, SUVs and pickup trucks speed past on the main road.

Oil refining is the chief livelihood in Ali Agha, a nearby village that survived on agriculture until 2005 ushered in five years of drought. Most of the remaining 400 residents have homes made of mud-brick walls and a roof of mud over straw and wood pillars. They rely on small generators for power. Water is drawn from nearby wells. Sewage passes through plastic pipes to a dump outside the village. There is a single school, which ends at ninth grade.

In an agreement overseen by Mr. Jarba and replicated in other villages, residents pledged to support Kurdish forces and denounce anyone joining Islamic State. "Life is hard and we struggle just to put food on the table," said one resident, who nonetheless sees his village as better off than others in the region.

The area's troubled history under the Syrian regime, which also used oil money to reward and punish local Kurds and Arabs, paved the way for Islamic State conquests this summer, analysts and residents said. Syrian government forces now have only a limited presence in two cities of the region.

As Hafez al-Assad, Syria's late strongman and father of the current president, began consolidating his power in 1970, he sought to subdue the resource-rich tribal areas, according to residents and tribal elders. Arabs from other parts of Syria were resettled here, with the most loyal granted the best land. Local tribal and social structures disintegrated in the power shift. Kurds, whose towns and villages were renamed in Arabic, were the biggest losers.

In the years before the uprising against President Bashar al-Assad in March 2011, people who pledged allegiance to the regime were rewarded with jobs and business in agriculture, oil and trading, said landowners and residents.

Once civil war broke out, the Assad regime focused on protecting Damascus and other cities to the west, largely abandoning land and resources here.

Fawaz al-Bechir, a leader from the Baggara tribe, which is concentrated in Syria's Deir Ezzour province, said he laughed when Syrian security officials in Damascus had asked him to rally his tribesmen to fight Islamic State.

"I told them, 'For decades you did everything to undermine our authority and weaken us and now you want us to help?'" Mr. Bechir said. The only way he can control his people is if he can pay them salaries or provide oil to compete with the Kurdish forces and Islamic State.

In the ensuing war, residents said, they looked to any group offering protection and steady work.

Hasan al-Khalil, an Arab tribesman and landowner who has joined forces with the Kurds, said it was understandable for people who had thrived under the regime to seek a similar accommodation with Islamic State. "They will do anything to stay on top of the tribal pyramid," he said.

When protests against Mr. Assad erupted, Mr. Jarba, the Shammar chieftain, said he discouraged his people from taking part. "Visibility was poor so to speak," he said, "and we couldn't tell where things were headed."

Karim al-Mifleh didn't take his leader's advice. Mr. Mifleh, 19 years old, said he and some of his 30 siblings -- his father has three wives -- engaged in protests. In 2012, he dropped out of ninth grade to join a rebel group set up by Mr. Jarba's cousin and linked to the Free Syrian Army, the secular rebel coalition backed by Saudi Arabia, Turkey and the U.S.

The militia swelled to some 10,000 men, mostly Shammar and related tribes and clans. Needing more funds for salaries and overhead, the group seized oil wells and took over the refining and sales, Mr. Mifleh said. He was paid 60,000 Syrian pounds, about $307, for guarding the wells.

Islamist rebels arrived in the region in early 2013, seeking a share of oil and other resources, including grain stores. At first, they joined forces with Mr. Mifleh's Shammar-dominated group. They ousted Assad regime forces from the Yaroubiyah border crossing in March 2013.

But the rebel groups had a falling out -- in part over the rising power of the Kurdish forces. Many fighters, including Mr. Mifleh, were absorbed by Islamic State, which was gaining strength.

The Kurdish militia fighters toward the middle of 2013 captured the Yaroubiyah border crossing, along with most of the oil wells and grain silos, from Islamist rebels.

At the time, Mr. Mifleh's father and some of his brothers were living in the Yaroubiyah area claimed by the Kurds. Mr. Mifleh and other fighters were captured in June by the Kurds after Islamic State launched a botched offensive to seize the border town, surrounding villages and nearby oil wells.

Mr. Mifleh is now in a prison run by Kurdish forces. His father, who works in the oil business under the protection of Kurds, has disavowed him for joining the militants.

In Islamic State territory to the south, fighters exploit local tribal tensions, playing one against the other, Mr. Mifleh said. They mistrust locals, referring to them in Arabic as supporters as opposed to those who have pledged allegiance. The militants also seek to foster enmity among Arabs toward Kurds. "They plant in our heads that Kurds are traitors and infidels who should be fought," he said.

Last month, Islamic State fighters kidnapped two Arab truck drivers transporting crude oil bought from the Kurds, a Kurdish security officer said. The drivers were killed, he said, and their heads were then severed and hung from the trucks on a main road not far from Yaroubiyah -- a warning to residents about cooperating with the Kurds.

In September, Islamic State recaptured four villages next to the border crossing here at Yaroubiyah. Kurdish security and military officials say the group is determined to seize the strategic border crossing, along with surrounding grain and oil resources.

The threat of an Islamic State attack loomed over a meeting last month in Yaroubiyah organized by the Kurds to help Arab residents, mostly Shammar, choose neighborhood councils and leaders.

Arab men, some in tribal dress, and women covered up except for their eyes, sat at classroom desks moved to the courtyard of a school for the meeting. Children giggled and played.

"We need people to volunteer for the neighborhood watch, you will coordinate directly with the Asayish," said the organizer referring to the Kurdish police. "You will report any suspicious person or car."

No one raised a hand.

"Come on, anyone, this is for your sake," the man said.

On a stretch of road outside of town, one villager had set up a makeshift gasoline station with a pump and two metal tanks filled with fuel from a nearby kiln. "Abu Luay's Fuel" was spray-painted in Arabic on one of the tanks.

---

Mohammad Nour al-Akraa in Beirut contributed to this article.

Credit: By Sam Dagher

Subject: Crude oil; Black markets; Kurds

Location: Syria

Company / organization: Name: Islamic State of Iraq & the Levant--ISIS; NAICS: 813940

Classification: 8510: Petroleum industry; 9178: Middle East

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.1

Publication year: 2014

Publication date: Nov 24, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627007046

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627007046?accountid=7117

Last updated: 20 17-11-21

Database: The Wall Street Journal

Some Traders Step Back From Oil Market Ahead of OPEC Meeting; Oil Prices Have Tumbled About 30% Since Mid-June

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

Some traders and investors are stepping back from the oil market ahead of the most widely watched OPEC meeting in years, anticipating that thin holiday trading could exacerbate big price swings.

Oil experts say the Organization of the Petroleum Exporting Countries, which controls roughly a third of global crude output, needs to curb production by at least 3%, or one million barrels a day, to bring supplies closer in line with demand. Such a move could put a floor under oil prices, which have plunged about 30% since mid-June. Oil prices settled down 73 cents, or 1%, at $75.78 a barrel Monday on the New York Mercantile Exchange.

OPEC is scheduled to meet on Thursday in Vienna. Many oil traders in the U.S. will be taking the day off for Thanksgiving. According to the Nymex schedule, electronic trading will run until 1 p.m. New York time on Thanksgiving, instead of the usual 5:15 p.m., and a closing price won't be set until the conclusion of regular trading on Friday. Closing prices are used to calculate averages, which underlie many trades and contracts used in the market. Trading in the Brent crude contract on ICE Futures Europe is to stop at 1:30 p.m. New York time on Thursday.

The uncertainty about the meeting's outcome and concerns about the ease of trading have prompted some investors to rein in their bets. Tariq Zahir, managing member of Tyche Capital Advisors, said he has closed out some positions ahead of the OPEC meeting and only has about one-fifth the exposure to the oil market that he usually does. He will be watching the market on Thanksgiving for trading opportunities, he said.

"With so many people traveling and out...you could see some extra volatility, which creates opportunity for guys like us, if you're on the desk," Mr. Zahir said.

Mr. Zahir said he believes that either OPEC won't cut output, at the insistence of No. 1 oil exporter Saudi Arabia, or that any cut will be symbolic. Officials from Saudi Arabia and other OPEC member nations have signaled that the group is unlikely to make a large, coordinated cut. On Monday, Saudi Arabia's oil minister Ali al-Naimi .

Instead, Mr. al-Naimi noted that this is not the first time the market has been oversupplied, further damping expectations that Saudi Arabia will respond to current market conditions by reducing production.

If the group keeps production steady or only reduces output by a small amount, prices could fall further, traders say, while a surprise large cut could send futures spiking.

Mr. Zahir isn't the only one scaling back bets. The number of futures and options contracts outstanding in the Nymex market fell by 13% in the week ended Tuesday to 2.1 million, the lowest level since Sept. 30, according to the U.S. Commodity Futures Trading Commission.

Money managers also reduced their bets on rising prices in the week ended Nov. 18 and added to their bets that prices would fall, underscoring the belief that OPEC is unlikely to significantly cut output.

may also influence the outcome of the OPEC meeting, some analysts say. Iran and six world powers failed to reach an agreement to curb the country's nuclear program on Monday and extended talks until the end of June, meaning that sanctions on the fifth-biggest producer in OPEC are likely to stay in place for the time being. Some analysts said the failure to strike a nuclear deal with Iran on Monday makes it less likely that OPEC will cut production this week, because members won't have to contend with the possibility of Iranian crude flooding the market.

"Based on all of the information and opinions floating around the market, I would say that the best position heading into the OPEC meeting...would be a flat position," wrote Dominick Chirichella, analyst at the Energy Management Institute, in a note released last week. "There will be ample opportunity once the meeting is over to enter into the appropriate trading position."

John Kilduff, founding partner at Again Capital in New York, said he has cut his bets. "I doubt I'll have to trade" on Thanksgiving Day, said Mr. Kilduff. "Unfortunately, the computer will be a fixture in the background."

Summer Said and Benoît Faucon contributed to this article.

Write to Nicole Friedman at

Credit: By Nicole Friedman

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 24, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627154839

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154839?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Price Slide May Curb Gulf States' Spending Plans; Investment Cuts Have Wider Implications for Governments Hoping to Shore Up Support

Author: Fitch, Asa

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Lower oil prices are threatening to curtail the spending that energy-rich Persian Gulf governments have used to shore up support since the Arab Spring.

Leaders in the Gulf have begun talking more openly about spending adjustments and economic diversification away from energy.

If oil prices, which have dropped to below $80 a barrel from more than $100 a barrel in July, continue to stay low, this slowdown could persist.

Saudi Arabia needs oil to trade at about $97.50 a barrel this year to sustain its spending without running a deficit or tapping reserves, according to the IMF.

Light, sweet crude futures settled at $76.51 in New York on Friday. Brent crude, the leading European oil benchmark, traded at an average of around $110 a barrel between 2011 and 2013.

Spending also has ballooned in the U.A.E., where Abu Dhabi pledged last year to build $90 billion of projects through 2017--many of them with the help of foreign companies. Bahrain, Qatar, Oman and to a lesser extent Kuwait have been on spending sprees, too.

The Gulf's big energy exporters, including Saudi Arabia, Kuwait, the U.A.E. and Qatar, could try to fight the decline in oil prices.

As some of the most influential members of the Organization of the Petroleum Exporting Countries, the cartel of big oil producers, they could agree to cut output in a bid to buoy prices.

But the group has so far failed to reach any consensus about reining in production, and it is unclear how much impact OPEC would have on prices if it did act.

The countries also could issue debt or tap into government savings if current oil receipts can't pay for planned expenditures, tiding them over while they make budget adjustments.

Still, Gulf countries are reluctant to drain sovereign-wealth funds, together estimated at more than $1 trillion, leaving spending cuts as the only other option outside of borrowing.

If Gulf countries do decide to dip into sovereign funds, it could force a pullback by some of the world's most active institutional investors.

In an era of greater austerity, funds may still make new investments using dividends and investment gains, but the flow of Gulf money into international markets could be slower.

The shift toward domestic spending has already prompted changes in sovereign-fund allocations in Qatar, where more new energy revenues have been flowing directly to the government, bypassing the Qatar Investment Authority, its main sovereign-wealth fund. The QIA "has been changing its strategy, becoming less illiquid and Europe-centric on the international side and more engaged in the local economy," said Victoria Barbary, the director of Institutional Investor's Sovereign Wealth Center, a London-based research group.

The IMF, meanwhile, recently reiterated calls to rein in spending. Christine Lagarde, the IMF's managing director, in October said Gulf countries needed to balance budgets more urgently given the oil-price decline.

The financial realities faced by oil-rich Gulf countries and the investors and companies that have grown used to high prices are stark.

"I think the Gulf economies will have to project fiscal discipline," Mr. Sfakianakis, the Ashmore director, said. "They don't want to be seen as profligate."

Write to Asa Fitch at

Credit: By Asa Fitch

Subject: Petroleum industry; Budget deficits; State budgets; Crude oil prices

Location: Kuwait Oman Bahrain Qatar Saudi Arabia

Company / organization: Name: Institute of International Finance Inc; NAICS: 813910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 24, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627154852

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154852?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Control of Syrian Oil Fuels War Between Kurds and Islamic State; Impoverished families in northeast Syria refine oil distributed by the warring sides to buy loyalty--or face the consequences.

Author: Dagher, Sam

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.

ProQuest document link

Abstract:

The militants use oil money to secure allegiance and support their war, according to interviews with tribal leaders, Islamic State militants and Kurdish military and intelligence officials. The Kurds produce about 40,000 barrels of crude oil a day from wells they control, according to Kurdish officials here.

Links: 360 Link to Full Text

Full text:

AL-YAROUBIYAH, Syria--Plumes of black smoke billow on the horizon of this border town in northeast Syria, a thumb-shaped corner of the country that pokes into neighboring Turkey and Iraq.

With oil now the only stable income in these impoverished rural communities, each side offers a choice: Fight us and die. Or, join us and earn a living.

The U.S. seeks to expand its support of fighting Islamic State for control of the towns and villages bound by the Tigris and Euphrates rivers. The Wall Street Journal found the conflict as murky as the sludge that spills from the makeshift kilns onto land grazed and farmed since Biblical times.

As one 27-year-old tribesman said, local Arabs are eager for oil income but most hate the Kurds as much as they fear Islamist militants.

Like the Kurds, Islamic State sells crude oil to kiln and refinery operators at discounted prices: On the world market, the crude might fetch $75-$80 a barrel. And like the Kurds, Islamic State hires local residents to protect and operate the oil fields--or join its ranks as fighters--with salaries as high as 100,000 Syrian pounds a month, about $512.

The violence that inflames Islamic State's Sunni Islamist extremists against all other Muslims--and all other religions--is focused here instead on control of land, resources, roads and border crossings that yield revenues.

"For as far as I can remember," he said, "these three provinces never had their own direction, always with the strongest and the power on the ground."

Mr. Jarba, who has joined forces with the , recently formed a Shammar militia to help fight Islamic State, which lurks as close as 20 miles southwest. In July, he was given the honorary post of governor of the al-Jazeera canton, one of the new Kurdish self-rule areas.

Armed members of Mr. Jarba's new militia, Jaish al-Karama--"Army of Dignity," in Arabic--guard the entrance of his gated compound, which has large sofa-lined rooms to host tribal meetings. Many of the guards wear checkered red-and-white kaffiyehs, or head scarves, and leather gun holsters. Fuel tankers, SUVs and pickup trucks speed past on the main road.

Once civil war broke out, the Assad regime focused on protecting Damascus and other cities to the west, largely abandoning land and resources here.

In the ensuing war, residents said, they looked to any group offering protection and steady work.

Karim al-Mifleh didn't take his leader's advice. Mr. Mifleh, 19 years old, said he and some of his 30 siblings--his father has three wives--engaged in protests. In 2012, he dropped out of ninth grade to join a rebel group set up by Mr. Jarba's cousin and linked to the Free Syrian Army, the secular rebel coalition backed by Saudi Arabia, Turkey and the U.S.

But the rebel groups had a falling out--in part over the rising power of the Kurdish forces. Many fighters, including Mr. Mifleh, were absorbed by Islamic State, which was gaining strength.

The Kurdish militia fighters toward the middle of 2013 captured the Yaroubiyah border crossing, along with most of the oil wells and grain silos, from Islamist rebels.

Mr. Mifleh is now in a prison run by Kurdish forces. His father, who works in the oil business under the protection of Kurds, has disavowed him for joining the militants.

Last month, Islamic State fighters kidnapped two Arab truck drivers transporting crude oil bought from the Kurds, a Kurdish security officer said. The drivers were killed, he said, and their heads were then severed and hung from the trucks on a main road not far from Yaroubiyah--a warning to residents about cooperating with the Kurds.

The threat of an Islamic State attack loomed over a meeting last month in Yaroubiyah organized by the Kurds to help Arab residents, mostly Shammar, choose neighborhood councils and leaders.

Arab men, some in tribal dress, and women covered up except for their eyes, sat at classroom desks moved to the courtyard of a school for the meeting. Children giggled and played.

No one raised a hand.

"Come on, anyone, this is for your sake," the man said.

Mohammad Nour al-Akraa in Beirut contributed to this article.

Write to Sam Dagher at

Credit: By Sam Dagher

Subject: Islam; Muslims; Religious fundamentalism; Military air strikes; Islamism

Location: United States--US Iraq Syria Turkey

Company / organization: Name: United Nations--UN; NAICS: 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 24, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627154899

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154899?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

China Loosens Debt Terms for Venezuela; With Default Threatening the Economy as Oil Prices Tumble, Caracas Gets a Lifeline From Its Biggest Creditor

Author: Vyas, Kejal

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

CARACAS, Venezuela--South America's most economically troubled country, facing fears of a debt default amid tumbling oil prices and a cash crunch, has been thrown a lifeline by its largest lender, China.

The Asian giant loosened repayment terms on the nearly $50 billion in loans it has granted Venezuela since 2007, according to Venezuela's Official Gazette. And President Nicolás Maduro said in a speech last week that his finance minister, Rodolfo Marco, would soon travel to China to try to secure new loans.

Mr. Maduro's popularity has plummeted to 30%, polls show, as Venezuela's currency collapses and the government struggles with the world's highest inflation rate and widespread scarcity of basic goods. The country's woes threaten the future of what Mr. Maduro's predecessor, the late President Hugo Chávez, called 21st Century Socialism.

Analysts say Beijing's flexibility may buy Mr. Maduro more time.

Last week the president used a $4 billion Chinese credit, traditionally earmarked by the Chinese government for infrastructure projects and held in off-budget funds, to increase reserves to $23.2 billion. China also recently lent $1.3 billion to help Argentina buoy falling reserves, giving President Cristina Kirchner, a close ally of Mr. Maduro, a cushion to help alleviate that country's cash crunch.

Beijing's largess may appear irrational given economic policies in Venezuela and Argentina that do not appear sustainable, said Barbara Kotschwar, a scholar who tracks Chinese investment in Latin America at the Peterson Institute for International Economics in Washington.

"On the other hand," Ms. Kotschwar said, "they are so invested in Venezuela's oil industry that they may have calculated that a political crisis would have a negative impact on their return on investment or on Venezuela's repayment of loans."

Venezuela's oil revenues, which account for 96% of the country's dollar income, are down by 35% in the past month, Mr. Maduro said in a speech last week in which he tried to assure his countrymen that the government was taking steps to safeguard against the consequences of the drop in oil prices.

Venezuela, hemorrhaging money through a Byzantine set of three official currency exchanges, was experiencing dollar shortages even with oil at $100 a barrel. On Friday, though, the country's average heavy crude oil price fell under $70 a barrel for the first time in four years.

As the oil exporter seen as most vulnerable to the commodity's slide, Venezuela has been pressing fellow members of the Organization of the Petroleum Exporting Countries to take measures to rescue prices at the cartel's next meeting Thursday in Vienna.

Amid the slump, China last month scrapped the requirement that Venezuela ship at least 330,000 barrels of oil a day as payment for its existing loans.

The reduced shipments of Venezuelan crude to China reflect the surplus in international oil markets as well as the Chinese economy's slower growth, but they also amount to a mutually beneficial arrangement.

Venezuela can divert more of its oil to cash customers, instead of using it for debt repayment. China, meanwhile, can play the long game, helping stabilize the Venezuelan economy while keeping the door open to an important market for its oil-services, drilling, mining, appliances and construction companies. China's biggest investments here are in the vast Orinoco heavy-oil belt, where Beijing has pumped billions of dollars into a joint venture with state energy giant Petróleos de Venezuela SA, or PdVSA.

"The whole idea of China getting into Latin America is to secure their supply lines, and in the short term they are secure," said Russ Dallen, managing partner at brokerage Caracas Capital Markets. "They are patient."

News of the loosened Chinese loan terms bolstering Venezuelan international reserves--down 21% from 2012--sparked a rally last week in Venezuelan bonds, which are the highest yielding in the developing world because of the perceived risk.

Analysts at the risk consultancy Eurasia Group said in a recent report that China's new terms will likely help Venezuela avoid a default next year. They also buy Mr. Maduro time to consider politically costly adjustments that economist say are necessary to plug a fiscal shortfall they estimate will reach 20% of gross domestic product in 2015. Those reforms include reducing a domestic gasoline subsidy that costs the state more than $12 billion a year and cutting back on overseas spending, including a program that provides cheap oil to more than a dozen Caribbean countries.

Venezuela's benchmark sovereign bond maturing in 2027 rose on Monday to 56.41 cents on the dollar with a yield of 18.2%, compared with 53.7 cents at the start of last week. By far, the juiciest yields come from PdVSA bonds, which mature in 2017, offering just over a 28% yield, compared with 31.5% a week earlier.

Write to Kejal Vyas at

Credit: By Kejal Vyas

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 24, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627154952

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154952?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Slip as Big OPEC Cut Looks Unlikely; Market Watchers Remain Focused on Nov. 27 Cartel Meeting in Vienna

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.

ProQuest document link

Abstract:

[...]U.S. investment bank Morgan Stanley says the market shouldn't ignore oil-producing countries that aren't members of OPEC.

Links: 360 Link to Full Text

Full text:

Oil prices wavered Monday before settling lower on expectations that the coming meeting of the Organization of the Petroleum Exporting Countries would fail to stem a monthslong plunge in oil prices.

Light, sweet oil for January delivery fell 73 cents, or 1%, to $75.78 a barrel on the New York Mercantile Exchange.

Brent, the global benchmark, fell 68 cents, or 0.9%, to $79.68 a barrel on ICE Futures Europe.

Prices rose earlier in the session on news that negotiations between Iran and six world powers to curb Iran's nuclear program are to be extended past Monday's deadline. Sanctions on Iranian oil exports, which are keeping hundreds of thousands of barrels of oil off the global market, haven't been lifted.

However, market watchers remained focused on the Nov. 27 OPEC meeting.

Oil prices have plummeted in recent months on concerns about ample global supplies. The cartel, which controls about one-third of global oil output, is currently producing above its collective production quota of 30 million barrels a day. Analysts say the group would have to cut production by at least a million barrels a day to bring global supplies closer in line with demand.

However, OPEC members, including top exporter Saudi Arabia, have signaled that the group is unlikely to make a big collective cut.

Saudi Arabia's oil minister said Monday that this isn't the first time the market has been oversupplied, damping expectations that the kingdom plans to reduce production.

"Failure [by OPEC] to convince the market that it is prepared to take some major steps to improve market balances is likely to result in heavy selling of oil," said analysts at Barclays in a note.

Price swings could be more volatile Thursday because trading will be thin as U.S.-based traders take the day off for Thanksgiving.

Trading in both the U.S. and Brent benchmark contracts will be halted for most of the afternoon, Eastern time, on Nov. 27 for Thanksgiving. However, the OPEC meeting, which will take place in Vienna, will likely conclude when it is still morning in New York.

Some analysts said the failed Iranian negotiations make it less likely that OPEC will cut production this week, because the members won't have to contend with more Iranian crude flooding the market.

"I don't think they're going to do much of anything," said John Kilduff, founding partner at Again Capital in New York. Prices "will grind lower after the meeting."

December reformulated gasoline blendstock, or RBOB, fell 2.31 cents, or 1.1%, to $2.0334 a gallon.

December diesel settled down 0.9 cent, or 0.4%, to $2.3955 a gallon.

Summer Said and Benoît Faucon contributed to this article.

Write to Nicole Friedman at

Corrections & Amplifications

An earlier version of this article misstated the diesel price.

Credit: By Nicole Friedman

Subject: Crude oil prices; Crude oil; Petroleum industry; Futures; Petroleum production

Location: United States--US Iran Saudi Arabia

Company / organization: Name: ICE Futures; NAICS: 523210; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: New York Mercantile Exchange; NAICS: 523210; Name: Commonwealth Bank of Australia; NAICS: 522110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 24, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627155071

Document URL: https://login.e zproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627155071?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Oil Isn't All that Ails Petrofac; The Company Is in a Tricky Transition Period

Author: Thomas, Helen

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.

ProQuest document link

Abstract:

[...]the services unit brings with it other risks that are proving difficult to predict or understand. [...]that changes, Petrofac likely won't get the benefit of the doubt that it can stay tough under fire.

Links: 360 Link to Full Text

Full text:

Applying stress is one way to test strength. At Petrofac, the cracks are just starting to show.

Tumbling crude prices, down 30% since June, . But Petrofac, which on Monday said next year's earnings would be 26% below the consensus forecast, has problems that go beyond its critical commodity.

About a quarter of the downgrade to next year's earnings relates to the oil price. Petrofac said that, based on current futures prices, oil's decline could knock $45 million off its previous guidance for 2015.

This is really a function of . Most oil-field services companies experience the pain of oil's plunge indirectly, as their biggest clients cut back on spending. But the U.K. engineering and construction company also co-invests in upstream projects through its integrated energy services (IES) unit. This leaves it directly exposed as the value of its share of production falls.

True, some changes to Petrofac's guidance relate to its core engineering and construction business. A write-down to the troubled Laggan-Tormore project in Shetland is a blow, as is the assumption of no profit on that contract next year. The problems with the project are largely weather related, so at least shouldn't bode ill for others in Petrofac's portfolio.

But it is the services division that now has form in producing unpleasant surprises. It generated only 20% of first-half operating profit this year but accounts for two-thirds of next year's earnings downgrade. Contract renegotiations led to slower work on two projects, hitting production and earnings next year. Worse, delays at the Great Stella project in the North Sea will push back first production.

That means the services business won't generate cash until 2016, rather than next year, extending a tricky transition period for Petrofac. It is still trying to prove the worth of its new venture, launched in 2011. Net debt will stay at peak levels for longer; Petrofac, until last year, generally operated with net cash on its balance sheet.

Petrofac, which at about seven times forecast earnings is trading at a steep discount to peers, should be a defensive bet in this market. Its engineering and construction business has a record business backlog and is focused onshore rather than offshore, where the spending slowdown is expected to be sharpest. About 70% of its business comes from national oil companies, which are more likely to keep investing than their listed, international counterparts.

But the services unit brings with it other risks that are proving difficult to predict or understand. Until that changes, Petrofac likely won't get the benefit of the doubt that it can stay tough under fire.

Write to Helen Thomas at

Credit: By Helen Thomas

Subject: Profits; Petroleum industry

Location: United Kingdom--UK

Company / organization: Name: Petrofac; NAICS: 541330, 236210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: No v 24, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627155080

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627155080?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Is It Time for the U.S. to Lift Its Restrictions on Oil Exports? Jason Bordoff on Why It Would Be Smart, Tyson Slocum on Why It Would Be Risky

Author: Anonymous

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.

ProQuest document link

Abstract:

[...]the U.S. oil price may fall further below the world price. [...]some maintain that oil exports will reduce the incentive for companies to innovate and develop ways to reduce oil use.

Links: 360 Link to Full Text

Full text:

It's a whole new oil world for the U.S.

So, should U.S. oil companies be allowed to sell that oil overseas?

Yes: It's Smart For Both Economic and Geopolitical Reasons

By Jason Bordoff

Opening the Doors

Critics say keeping oil at home helps protect us from oil-price shocks, but the oil market is global. A disruption anywhere will cause prices to go up in the U.S., whether we export or not.

The Effect on the Pump

The current statutory restrictions on oil exports are a legacy of a bygone era that doesn't reflect today's energy reality. On economic, security and geopolitical grounds, they should be lifted.

No: The U.S. Would Be More Vulnerable To Supply Disruptions

By Tyson Slocum

Removing the export ban is a shortsighted move that will have bad consequences both for consumers and for the economic future of the U.S.

The Price at the Pump

Some supporters of exporting also say we need to allow exports to achieve credibility in trade talks. But crude oil has long been exempt from trade negotiations, so the ban is a nonfactor.

True Economic Strength

Then there is the environment. As with any extractive industry, the impacts of fracking on precious resources will be exacerbated by the increase in fracking should the ban be lifted.

Mr. Slocum is director of the Energy Program at Public Citizen. He can be reached at .

Subject: Petroleum refineries; Exports; Petroleum industry; Energy policy; International trade; Wage & price controls; Trade restrictions; Petroleum production; Gasoline prices; Energy industry

Location: United States--US

People: Obama, Barack

Company / organization: Name: Columbia University; NAICS: 611310; Name: Public Citizen; NAICS: 541820, 541910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 24, 2014

Section: Special

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627156488

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627156488?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Anxiety on OPEC Stalls Oil Trading

Author: Friedman, Nicole

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Nov 2014: C.6.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Some traders and investors are stepping back from the oil market ahead of the most widely watched OPEC meeting in years, anticipating that thin holiday trading could exacerbate big price swings.

Oil experts say the Organization of the Petroleum Exporting Countries, which controls roughly one-third of global crude output, needs to curb production by at least 3%, or one million barrels a day, to bring supplies closer in line with demand.

Such a move could put a floor under oil prices, which have slid about 30% since mid-June. On Monday, oil prices fell 73 cents, or 1%, to $75.78 a barrel on the New York Mercantile Exchange.

OPEC is scheduled to meet on Thursday in Vienna. Many oil traders in the U.S. will be taking the day off for Thanksgiving.

According to the Nymex schedule, electronic trading will run until 1 p.m. New York time on Thursday, instead of the usual 5:15 p.m., and a closing price won't be set until the conclusion of regular trading on Friday. Closing prices are used to calculate averages, which underlie many trades and contracts used in the market. Trading in the Brent crude contract on ICE Futures Europe is to stop at 1:30 p.m. New York time on Thursday.

The uncertainty about the meeting's outcome and concerns about the ease of trading have prompted some investors to rein in their bets. Tariq Zahir, managing member of Tyche Capital Advisors, said he has closed out some positions ahead of the OPEC meeting and has only about one-fifth the exposure to the oil market that he usually does. He will be watching the market on Thanksgiving for trading opportunities, he said.

"With so many people traveling and out . . . you could see some extra volatility, which creates opportunity for guys like us, if you're on the desk," Mr. Zahir said.

Mr. Zahir said he believes that either OPEC will decline to cut output, at the insistence of No. 1 oil exporter Saudi Arabia, or that any cut will be symbolic. Officials from Saudi Arabia and other OPEC member nations have signaled that the group is unlikely to make a large, coordinated cut. On Monday, Saudi Arabia oil minister Ali al-Naimi declined to comment on the kingdom's stance.

Instead, Mr. al-Naimi noted that this isn't the first time the market has been oversupplied, further damping expectations that Saudi Arabia will respond to current market conditions by reducing production.

If the group keeps production steady or reduces output by only a small amount, prices could fall further, traders say, while a surprise large cut could send futures spiking.

Mr. Zahir isn't the only one scaling back bets; the number of futures and options contracts outstanding in the Nymex market fell 13% in the week ended last Tuesday to 2.1 million, the lowest level since Sept. 30, according to the U.S. Commodity Futures Trading Commission.

Money managers cut their bets on rising prices in the week ended Nov. 18 and added to bets that prices would fall, underscoring the belief OPEC is unlikely to significantly cut output.

Negotiations on Iran's nuclear ambitions may also influence the outcome of the OPEC meeting, some analysts say. Iran and six world powers failed to reach an agreement to curb the country's nuclear program on Monday and extended talks until the end of June, meaning that sanctions on the fifth-biggest producer in OPEC are likely to stay in place.

Some analysts said Monday's failure to strike a nuclear deal with Iran makes it less likely that OPEC will cut production this week because members won't have to contend with the possibility of Iranian crude flooding the market.

"Based on all of the information and opinions floating around the market, I would say that the best position heading into the OPEC meeting . . . would be a flat position," wrote Dominick Chirichella, analyst at the Energy Management Institute, in a note released last week. "There will be ample opportunity once the meeting is over to enter into the appropriate trading position."

---

Summer Said and Benoit Faucon contributed to this article.

Credit: By Nicole Friedman

Subject: Crude oil; Commodity prices

Classification: 9190: United States; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.6

Publication year: 2014

Publication date: Nov 25, 2014

column: Commodities

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627212123

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627212123?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Slide as OPEC Deal Appears Elusive; Benchmark U.S. Oil Prices Sink to New Four-Year Low

Author: Berthelsen, Christian; Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.

ProQuest document link

Abstract:

Beyond a straightforward decision on whether to reduce production, the group could choose incremental cuts, it could allocate decreases among certain members of the group but not others, or it could emerge saying it won't cut but it will strictly enforce its production quota of 30 million barrels a day, which it often exceeds.

Links: 360 Link to Full Text

Full text:

Benchmark U.S. oil prices sank to a new four-year low on Tuesday amid signs of a lack of agreement among OPEC members on a need to cut production and shore up the market.

The Organization of the Petroleum Exporting Countries is scheduled to meet in Vienna on Thursday to seek a consensus on whether and how to reduce output and stabilize prices, which have fallen more than 30% since mid-June amid growing global oil surplus. But signals sent by individual member nations thus far suggest there is little agreement on the matter, including how it would be achieved.

On Tuesday, member nations Saudi Arabia and Venezuela apparently held an impromptu meeting with nonmembers Mexico and Russia, but the group broke up without announcing any kind of proposal. Igor Sechin, head of Russian state oil company Rosneft, said that Russia couldn't immediately cut production anyway and that "the current price level isn't critical for us."

Oil futures had been treading water early in the trading session ahead of Thursday's meeting but dived after those developments. The U.S. contract for January settled down $1.69, or 2.2%, at $74.09 a barrel on the New York Mercantile Exchange, its lowest level since Sept. 21, 2010, while the global Brent contract for January fell $1.35, or 1.7%, to $78.33 a barrel on the ICE Futures Europe exchange.

"I think the market's taking that negatively as if there aren't going to be any production cutbacks from OPEC," said Andrew Lebow, a trader at Jefferies. "The market today is just growing somewhat anxious about whether there are going to be production cuts."

The market pared losses in midafternoon there may be preliminary agreement among member nations, including de facto leader Saudi Arabia, to more strictly enforce the existing production quota of 30 million barrels a day. Such a move could remove at least 300,000 barrels from the market based on recent data.

Still, it would fall short of the 1 million-barrel cut analysts say is necessary to stabilize the global supply-and-demand balance, and thorny questions remain about how the reduction would be apportioned among members and enforced. The market gave back gains as it faded into the close.

In the U.S. domestic market, traders are awaiting the latest weekly inventory data from the U.S. Energy Information Administration for a window into current U.S. supplies. Crude oil inventories are expected to fall by 100,000 barrels according to a survey of analysts by The Wall Street Journal, while gasoline inventories are expected to rise 1.1 million barrels, distillate inventories are expected to fall 900,000 barrels and refinery usage is expected to rise 0.4 percentage point to 91.6% of capacity.

In its own survey released late Tuesday, industry trade group American Petroleum Institute said crude stocks rose 2.8 million barrels, gasoline remained flat, distillates fell 1.3 million barrels and refinery usage rose 1.2 percentage points.

In refined product markets, December gasoline futures lost 0.16 cent per gallon, or 0.1%, to settle at $2.0318 a gallon on the Nymex. December heating oil lost 0.07 cent to settle at $2.3948 a gallon.

Benoît Faucon, Summer Said and Sarah Kent contributed to this article.

Write to Christian Berthelsen at

Credit: By Christian Berthelsen and Nicole Friedman

Subject: Petroleum industry; Cartels; Meetings

Location: Iraq United States--US Saudi Arabia

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: PIRA Energy Group; NAICS: 541618

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 25, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627688476

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627688476?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

U.S. Stocks Inch Lower, Snapping Streak of Record Highs; Renewed Slide in Oil Prices Weighs on Energy Shares

Author: Scaggs, Alexandra

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.

ProQuest document link

Abstract:

Wednesday will bring a flurry of U.S. economic reports, including readings on durable goods orders, personal income and new home sales, among others.

Links: 360 Link to Full Text

Full text:

U.S. stocks broke a three-session streak of record highs Tuesday, as a renewed slide in oil prices dragged down energy shares.

The Dow Jones Industrial Average slipped 2.96 points, or less than 0.1%, to 17814.94. The S&P 500 index shed 2.38 points, or 0.1%, to 2067.03 and the Nasdaq Composite Index rose 3.36 points, or 0.1%, to 4758.25. The Dow and S&P both retreated slightly from their latest all-time highs, reached Monday.

Energy stocks in the S&P 500 fell 1.6%, as to settle at $74.09 a barrel. that to more closely adhere to its production quota of 30 million barrels a day. Still, the move would fall short of an outright production cut, which analysts say is needed to halt a monthslong drop in crude-oil prices. OPEC ministers are scheduled to meet Thursday in Vienna.

The session was quiet for stock trading. Traders said volumes were low ahead of the Thanksgiving holiday on Thursday.

"It's pretty slow," said Jeffrey Yu, head of single-stock derivatives trading at UBS AG. "It's unlikely there will be a significant move ahead of the holiday season."

Even energy stocks were less volatile than in recent sessions, Mr. Yu said, as investors hesitated to make big trades before Thursday's OPEC meeting.

Economic data was mixed Tuesday. The Commerce Department reported the U.S. economy grew at its fastest pace in more than a decade during the spring and summer. But readings on consumer confidence and central-Atlantic manufacturing missed forecasts. The Conference Board said that consumer confidence fell to 88.7 in November, while 96.5 was expected, and a measure of manufacturing activity in the central Atlantic region came in below expectations.

Growth in the U.S. is widely expected to outpace that of Europe and Asia, where policy makers have introduced stimulus efforts to boost their economies. That has led some investors to favor U.S. stocks.

"It's all back to domestic growth," said Ralph Segall, chief investment officer of Chicago-based Segall Bryant & Hamill, which manages more than $9 billion. His firm is picking up midcap and small-cap stocks, rather than larger companies that do business overseas.

The GDP report didn't provide much fuel for stocks to move higher, strategists said, because valuations are above long-term averages. The S&P 500 is trading at 16.2 times its expected earnings for the next 12 months, above its 10-year average of 13.9.

"No one would accuse the stock market of being screamingly attractive," said Dan Greenhaus, chief strategist at New York brokerage firm BTIG. But "if the economic trend continues, we should have better earnings going forward."

Wednesday will bring a flurry of U.S. economic reports, including readings on durable goods orders, personal income and new home sales, among others.

The Organization for Economic Cooperation and Development on Tuesday called for more stimulus in the eurozone and a softening of fiscal discipline. The OECD highlighted the eurozone as the weak spot in the global economy. The Stoxx Europe 600 rose 0.2%.

Japanese stocks rose 0.3% following a holiday on Monday.

In commodity markets, gold futures gained 0.1% to $1197.10 an ounce.

Treasury prices rose, pushing the yield on the 10-year note down to 2.261%.

In corporate news, Hormel Foods Corp. fell 5.2% after per-share earnings fell shy of expectations. It said revenue for the latest quarter rose 9.5% to $2.54 billion, beating analysts' estimates.

Christian Berthelsen and Nicole Friedman contributed to this article.

Write to Alexandra Scaggs at

Credit: By Alexandra Scaggs

Subject: Petroleum industry; Stock exchanges; Investments; Economic indicators; Crude oil prices; Eurozone

Location: United States--US

People: Wieting, Steven

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 25, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627702722

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627702722?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Nigerian Central Bank Raises Interest Rate; Move Aimed at Curtailing Speculation Against Currency Battered by Slide in Oil Price.

Author: Cox, Josie; Akingbule, Gbenga

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.

ProQuest document link

Abstract:

Attempting to stanch the slide, the Central Bank of Nigeria earlier this month sought to temper dollar demand by barring importers of goods, including electronics, generators and telecommunications equipment, from procuring dollars at its foreign-exchange auctions.

Links: 360 Link to Full Text

Full text:

The Central Bank of Nigeria raised the country's interest rate to a record high on Tuesday, in a move aimed at curtailing speculation against its currency, which has been battered in recent months by the relentless slide in the price of oil.

The central bank increased the benchmark interest rate to 13% from 12%, with 9 out of the 11 members voting for the move. It also widened the trading corridor for the naira, allowing it to devalue to an official level of 168 versus the U.S. dollar from about 155, and widened the trading corridor from plus or minus 3% to plus or minus 5%.

"Although we had forecast some tightening, the central bank has exceeded expectations," said Razia Khan, head of African macro research at Standard Chartered Bank in London.

"[It] has shown absolute commitment to dealing with current challenges [and] we think that these measures deal as comprehensively as possible with the challenges facing Nigeria," she added.

Charlie Robertson, global chief economist and head of macro strategy at Renaissance Capital echoed this.

This "shows the CBN is serious about defending the new currency level," he said.

In a statement, Godwin Emefiele, the governor of the central bank, described the country's fiscal revenue outlook as "not too impressive."

"Against this background, the committee is of the view that the current challenge requires bold policy moves on both the demand and supply sides of the foreign exchange market," he said.

Markets were closed when the announcement was made, but one trader said that the naira had hardly responded to the news, continuing to hover around the all-time low of 178.25 hit against the dollar in the open markets ahead of the decision.

So far this year, the naira has fallen more than 10% against the dollar, placing Nigeria among those oil-rich nations hardest hit by a production glut that has led to a near 28% drop in Brent crude prices in the past three months.

It also limited the amount that money lenders can deposit in the bank's so-called Standing Deposit Facility to 7.5 billion naira, or about $44 million. At the time, traders said that the regulation should boost naira liquidity among banks.

Oil and natural gas account for 96% of export revenue in Africa's top producer, and about 80% of government revenue, according to the International Monetary Fund.

Write to Josie Cox at

Credit: By Josie Cox and Gbenga Akingbule

Subject: Central banks; Interest rates; Foreign exchange markets

Location: Nigeria United States--US

Company / organization: Name: Standard Chartered Bank; NAICS: 522110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 201 4

Publication date: Nov 25, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627729549

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627729549?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

France to Prosecute Total SA Over Iranian Contracts in the 1990s; Oil Company Faces Corruption Charges After Investigation Coordinated With U.S.

Author: Landauro, Inti

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.

ProQuest document link

Abstract:

U.S. prosecutors alleged in court documents that Total bribed an Iranian official to obtain lucrative oil and gas concessions, in violation of the Foreign Corrupt Practices Act, which is the 1977 law that bars companies that issue securities from paying bribes overseas.

Links: 360 Link to Full Text

Full text:

PARIS--Total SA will face corruption charges in a French court related to contracts made in Iran in the 1990s, a spokeswoman for the Paris prosecutor said on Tuesday.

Paris magistrates have decided to put the big French oil company on trial, along with two Iranian nationals. They had also planned to put the company's former chief executive Christophe de Margerie on trial, before he was killed in a plane crash at a Moscow airport last month.

No date has been set for the trial yet, said the spokeswoman.

The magistrates' decision follows a recommendation made last year by the prosecutor to prosecute the company. Under French law, magistrates can pursue corporations as well as individuals.

A Total spokesman on Tuesday confirmed the company had been informed of the magistrate's decision to prosecute it, but he declined to comment further.

Total has said in the past that the company and Mr. de Margerie acted in accordance with all applicable French laws in regard to the Iranian contracts in question. If convicted, the company could face a fine of as much as 150,000 euros ($186,000).

The French probe into Total's Iranian activities was part of coordinated legal action with the U.S. Department of Justice and the Securities and Exchange Commission, which last year fined the company a combined $398 million in the same case.

As part of the agreement with the Justice Department, the company had agreed to hire an outside lawyer to oversee its compliance with anticorruption laws and to invest in its internal mechanisms to look for corrupt payments. After three years, the Justice Department will drop criminal charges if prosecutors are satisfied with Total's efforts.

The French and U.S. investigations began in earnest in the mid-2000s. In 2007, a few months after he was appointed chief executive of Total, Mr. de Margerie was questioned for 48 hours by French police who were probing whether the oil company paid bribes to win contracts. Total said at the time all payments were legal.

Write to Inti Landauro at

Credit: By Inti Landauro

Subject: Trials

Location: United States--US Iran

Company / organization: Name: Securities & Exchange Commission; NAICS: 926150; Name: Department of Justice; NAICS: 922130

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 25, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627757920

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627757920?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Pressure Seen Mounting on Norway Oil Fund to Shed Coal Assets in 2015; Report Presented by Three Environmental Organizations Urges Shedding Coal Holdings

Author: Hovland, Kjetil Malkenes

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

OSLO--Norway's $870 billion sovereign-wealth fund may be forced to shed coal assets such as Coal India Ltd. and China Shenhua Energy Co. Ltd. next year as pressure mounts for Parliament to act on fossil fuel divestments.

A report presented in Oslo on Tuesday by three environmental organizations urged Norway to shed the fund's coal holdings. A second report, due next week, could put the fund under still more pressure to cut back on its coal investments. It will examine if climate change is more effectively addressed by preventing the fund from investing in certain coal related companies than by trying to affect change at the companies themselves.

The Norway fund's coal holdings are estimated by the environmental organizations at 82.68 billion Norwegian kroner ($12.14 billion) and include Australia's BHP Billiton Ltd., Coal India Ltd. and coal-intensive utilities like RWE AG and E. ON SE.

"I'm hoping that it will be a meaningful divestment," said Heffa Schücking of German organization Urgewald, who penned Tuesday's report, adding that the fund should at least exclude companies in the expanding Indian and Chinese coal sectors as well as BHP Billiton, and South Africa's Sasol, which produces liquids from coal.

There is currently a Parliamentary majority in Norway to order the sovereign-wealth fund, the world's largest, to divest from coal, a move that could potentially be followed by other institutional investors. Parliament will likely make a final decision by next summer.

"Yes, we want to exit coal," Ola Elvestuen, a member of parliament for Norway's Liberal Party, told The Wall Street Journal Tuesday. "To what degree there's need of tough negotiations, we'll need first to get the basis material and the different parties' response before we know."

The Norwegian right-wing minority government, supported in Parliament by the Liberals and Christian Democrats, has tasked an expert group to consider the if the fund exits coal,. This is the report that is due to be published next week.

"We've said that we'd expect that [an exit from coal] will be the conclusion, but we've said we'll wait for the reports, and discuss it in our party before concluding," Hans Olav Syversen, a Christian Democrat MP, told The Wall Street Journal.

"If we do this right, it could also have an effect on other similar funds," said Mr. Elvestuen.

Norway's oil fund estimated in January the value of its coal assets at 2.6 billion Norwegian kroner if only pure-play coal producers are included, and up to 116 billion kroner if general mining companies and coal-exposed electric utilities are also included. The expert group will also advise on how to define coal.

"We were very negative to exclude coal to begin with, but accepted a Parliament proposal to form the expert group," said Ministry of Finance state secretary Paal Bjørnestad. "Of course, the wider the definition of the coal sector, the bigger the consequences. The portfolio will be less optimal."

The Norwegianwas set up in the 1990s to act as the main investment vehicle for Norway's vast oil wealth. It has expanded more than tenfold in the past decade and is expected to be valued at 7.533 trillion kroner by 2020.

Write to Kjetil Malkenes Hovland at

Credit: By Kjetil Malkenes Hovland

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 25, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627757927

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627757927?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Russia Won't Cut Oil Production to Support Prices; Oil Czar's Comment Raises Stakes Ahead of Thursday OPEC Meeting

Author: Marson, James

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

MOSCOW--Russia's oil czar said the country wouldn't reduce production to support prices, raising the stakes ahead of a crunch summit of the Organization of the Petroleum Exporting Countries on Thursday.

Speaking after a meeting with officials from major oil producers Tuesday, Igor Sechin, chief executive of Russian state oil giant OAO Rosneft, said the current oil price "isn't critical for us," adding that Russia couldn't cut oil output immediately, unlike OPEC producers.

At Thursday's OPEC summit, officials are to discuss potential responses to a 30% fall in the oil price since the summer. Russia isn't a member of OPEC, but the decline has damaged its economy and pushed its currency lower.

Venezuelan Foreign Minister Rafael Ramírez said participants in Tuesday's meeting, which also included senior government officials from Saudi Arabia and Mexico, had "their own vision of the market," but agreed that the current .

"Everyone is worried about price," he told reporters.

Despite Mr. Sechin's statement, the OPEC meeting is likely to be one of the most momentous in years for the Kremlin because a failure to support oil prices could deal a severe blow to Russia's economy and its currency.

The ruble has weakened about one-third against the U.S. dollar this year amid Western sanctions and the oil-price slide.

The lower price has cost the country's economy as much as $100 billion this year, Finance Minister Anton Siluanov said Monday. Economic growth is forecast at no more than 0.5% this year.

"If OPEC doesn't make a decision to cut production, or it does and it makes no impact, then the ruble could fall further, sending up inflation and unsettling confidence," said Chris Weafer, senior partner at Moscow consultancy Macro Advisory.

The fall in the ruble has softened the impact of lower revenues in dollar terms to the federal budget, which relies on oil and gas exports for about half of its income.

But a further oil-price slide that sends the ruble lower could risk igniting a currency crisis that Russia has so far avoided, analysts said.

Russia's central bank earlier this month abandoned its policy of selling dollars from its reserves to smooth the ruble's fall, after burning through $28 billion in October.

But the central bank's willingness to let the ruble float freely could be tested if the ruble resumes its decline, sending Russians to banks and exchange booths to switch into foreign currencies, Mr. Weafer said.

"Russia will face a decision: to let the ruble weaken over 50 to the U.S. dollar, or defend the ruble and be downgraded to junk status" by ratings firms, he said.

The ruble weakened 1% Tuesday to 46 to the dollar after a few days of strengthening as companies bought up rubles to pay monthly taxes and stabilized.

Newspaper reports on Monday suggested Russia, one of the world's top three oil producers alongside Saudi Arabia and the U.S., could cut production in coordination with OPEC , a reminder of pledges in earlier years by Moscow to reduce output that never amounted to anything.

But Bloomberg cited Mr. Sechin, a close ally of President Vladimir Putin, as saying that Russia wouldn't need to cut production even if oil fell to $60 a barrel.

Mr. Sechin said Rosneft could reschedule some capital-intensive projects, and had already cut production by a tiny amount for efficiency reasons.

In an interview broadcast Monday on state television, Russian Energy Minister Alexander Novak said Russia would keep output steady in the next few years.

"That's our contribution to stabilize the situation on global oil markets," he said.

Analysts said output in Russia may edge down next year anyway due to sanctions and lower profitability, which officials could present as an accommodation to OPEC.

Benoît Faucon and Sarah Kent contributed to this article.

Write to James Marson at

Credit: By James Marson

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 25, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627762195

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627762195?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

OPEC Members Inch Toward Oil-Supply Cuts

Author: Faucon, Benoit; Said, Summer; Kent, Sarah

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Nov 2014: C.7.

ProQuest document link

Abstract:

Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, is likely to side with calls for the group to adhere more closely to its self-imposed production ceiling at Thursday's meeting of OPEC oil ministers, according to a Gulf official familiar with the Saudi position.

Links: 360 Link to Full Text

Full text:

VIENNA -- OPEC members are inching toward a compromise that could lead them to cut oil supply, as the producer group this week prepares for one of its most closely watched meetings in years.

Support for such a move, which would be based on tighter compliance with OPEC's existing output limit as opposed to an outright cut to its production target, was coalescing last week at a meeting of OPEC advisers, according to several of those who were present. With oil prices having recently stabilized at around $80 a barrel following a 30% slide since the summer, some within OPEC have seen less urgent need for the group to take stronger action.

But as late as last week, the Saudis' likely approach at Thursday's meeting was unclear to most members. "Saudi Arabia will likely go for a rollover" of the current ceiling, the Gulf official said on Tuesday. A call for strict compliance would be "an option they would go for." But Riyadh's intentions haven't been clearly telegraphed to other members, and it could decide to go a different route Thursday.

OPEC members have engaged in an unusually frantic round of shuttle diplomacy ahead of this week's gathering, with some poorer countries calling for deep supply cuts to boost oil prices. Brent crude ended 1.7% lower at $78.33 a barrel on Tuesday after a meeting among Saudi Arabia, Venezuela and non-OPEC members Russia and Mexico resulted in no agreement to cut oil production. The benchmark crude-oil contract on the New York Mercantile Exchange fell 2.2% to $74.09 a barrel.

OPEC three years ago agreed to limit its collective output to 30 million barrels of oil a day. But its actual production has regularly spilled over as each member has pushed to maintain its share of global oil markets. Closer compliance would imply a supply cut of around 300,000 barrels of oil a day from October levels, according to OPEC technocrats who met last week.

By some distance OPEC's largest oil producer, Saudi Arabia has been unusually reticent in the run-up to this week's meeting. Its oil minister, Ali al-Naimi, refused to answer questions about the country's stance when he arrived in Vienna on Monday.

Earlier this month, Mr. al-Naimi told Venezuela's foreign minister, Rafael Ramirez, that the kingdom wouldn't cut its oil output alone, according to people familiar with the matter.

But a supply cut of around 300,000 barrels a day is unlikely to satisfy some OPEC members, such as Venezuela and Iran, who need oil prices well above $100 a barrel to balance their government budgets.

An OPEC production cut of around 1.5 million barrels would be needed to tighten global oil markets next year, according to oil analysts at Barclays.

Current oil prices "aren't acceptable, of course not," Iraq's oil minister Adel Abdul-Mehdi told reporters upon arriving in Vienna. "A means should be used to raise the prices," he said.

But officials from Persian Gulf countries are concerned that deep output cuts would prove self-defeating since a rise in oil prices would only encourage further U.S. shale-oil production. OPEC members could then lose market share, one Gulf oil official said.

Credit: By Benoit Faucon, Summer Said and Sarah Kent

Subject: Crude oil; Commodity prices

Classification: 9190: United States; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.7

Publication year: 2014

Publication date: Nov 26, 2014

column: Commodities Report

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Ne wspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627903625

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627903625?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Sag on Saudi Minister's Remarks About Output; Pessimism Grows Over Chances for Big Moves From OPEC to Stop Price Slide

Author: Puko, Timothy

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Nov 2014: n/a.

ProQuest document link

Abstract:

U.S. shale-oil producers need oil prices in the range of $53 to $78 a barrel to break even, depending on their circumstances, meaning most are profitable even with prices at current levels, according to estimates presented at an OPEC technical meeting last week.

Links: 360 Link to Full Text

Full text:

NEW YORK--Oil prices sagged to four-year lows on Wednesday, as Saudi Arabia's oil minister hinted he wouldn't push for a cut in OPEC's production targets.

The Organization of the Petroleum Exporting Countries is gathering for its most closely watched meeting in years, and observers are growing pessimistic about the cartel making any big moves to stop the 30% slide in prices since the summer.

Saudi Oil Minister Ali al-Naimi said on Wednesday that he expected the market "to stabilize itself eventually," breaking his silence on the state of the market.

"I think it's pretty clear coming out of these meetings that there will not be a production cut," said John Kilduff, founding partner of Again Capital in New York, which invests in energy commodities. "The Saudis have prevailed in making it clear that the only people they'd be helping with a production cut is the competition--U.S. shale producers," Mr. Kilduff said.

Light, sweet crude for January on the New York Mercantile Exchange fell 40 cents, or 0.5%, to $73.69 a barrel, its lowest settlement since Sept. 21, 2010. The global Brent contract for January fell 58 cents, or 0.7%, to $77.75 a barrel on the ICE Futures Europe exchange, also a four-year low.

The onslaught of oil produced from unconventional drilling in the U.S. and Canada has changed the global market. OPEC, long politically influential and dominant in production, has been losing market share to this new competition.

Kuwaiti oil minister Ali Saleh Al-Omair said on Wednesday that OPEC has to live with oil prices as low as $60 a barrel. "We have to live either with $80 or $60 or $100 a barrel," he said.

U.S. production surpassed 9 million barrels a day for the first time in decades this month, and it is still growing. The U.S. added another 73,000 barrels of daily production, and stockpiles rose to nearly a five-month high, in the week ended Nov. 21, the U.S. Energy Information Administration said on Wednesday.

U.S. crude-oil stockpiles rose by 1.9 million barrels, compared with expectations for a 100,000 decline. The market barely moved on the news, with many traders having grown used to relentless growth in U.S. production, said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. "It's not really that surprising," Mr. Cooper said.

Many market participants were also fully focused on news coming from OPEC ministers. Few wanted to make major moves before the cartel announces its official decision on whether to cut production.

Oil prices are likely to swing several dollars a barrel up or down, based on whether OPEC cuts output or maintains current levels, investors said. Mr. Kilduff said he expects prices could fall to $68 a barrel immediately after the meetings, if OPEC doesn't curtail the global glut of oil.

In refined product markets, December gasoline futures lost 0.33 cent, or 0.2%, to settle at $2.0351 a gallon on the Nymex. December heating oil gained 0.17 cent, or 0.1%, to settle at $2.3965 a gallon.

Write to Timothy Puko at

Credit: By Timothy Puko

Subject: Crude oil prices; Petroleum industry; Meetings

Location: United States--US Saudi Arabia

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 26, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627923160

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627923160?accountid=7117

Last updated: 2017-11-24

Database: The Wall Street Journal

Russian Finance Minister Warns Oil Prices Likely to Remain Low; Russia Must Rein in Spending to Offset Revenue Shortfall From Lower Oil Price, Says Anton Siluanov

Author: Kolyandr, Alexander

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Nov 2014: n/a.

ProQuest document link

Abstract:

[...]falling oil prices have dealt a severe blow to the country's economy and its currency.

Links: 360 Link to Full Text

Full text:

MOSCOW--Lower oil prices are here to stay for the long term and the country's budget should be adjusted accordingly, Russia's finance minister said Wednesday.

"The new oil prices, between $80 and $90 a barrel, most probably will stay in the mid to long-term," Anton Siluanov told the upper house of parliament, before it formally approved the country's budget for the next three years.

Russian budgetary expenses have been growing faster than inflation for years while oil prices remained high. The country's budget for the next year is still based on an average oil price of $100 per barrel and economic growth of 1.2%. The government now accepts that this outlook may be too optimistic.

The finance minister said that if oil prices remain at their current low level and Russia's economy fails to pick up, budget revenue may fall short by a trillion rubles ($21 billion).

Mr. Siluanov said nevertheless the government wouldn't default on its social obligations, but would rather try to spend budgetary funds "more effectively".

He added that Russia "most probably" won't borrow any funds from global markets, but would rather raise debt domestically.

Oil prices have plunged from over $100 a barrel as demand has weakened as a result of slower economic growth in China and Europe, while global supply has increased.

Russia is the world's third-largest oil producer and its economy is heavily dependent on oil exports, with the sale of hydrocarbons accounting for about a half of its annual budget revenue. Hence, falling oil prices have dealt a severe blow to the country's economy and its currency. The against the dollar this year amid Western sanctions and the sharp slide in oil prices.

The ruble's depreciation should partly offset the fall in oil prices as the budget will receive more rubles for every dollar from exported oil, resulting in higher ruble-denominated budget revenue.

Nonetheless, the lower oil price has cost the country's economy as much as $100 billion this year, Mr. Siluanov said. Russia's economy is forecast to grow no more than 0.5% this year.

Separately, Russia's energy minister said Wednesday that Russia will produce this year as last year, the Interfax news agency reported. Alexander Novak also said he was skeptical about possible plans to cut oil production by the Organization of the Petroleum Exporting Countries, , in a bid to boost prices.

Andrey Ostroukh contributed to this article.

Write to Alexander Kolyandr at

Credit: By Alexander Kolyandr

Subject: Petroleum industry; Energy economics; Budgets; Crude oil prices; Petroleum production

Location: Russia

People: Novak, Alexander

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 26, 2014

Section: Europe

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627934167

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627934167?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Seadrill Halts Dividends to Cut Debt; Oslo-Listed Oil Services Company Readies for Consolidation

Author: Hovland, Kjetil Malkenes

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Nov 2014: n/a.

ProQuest document link

Abstract:

Mergers have been expected in the oil-services sector following a between Halliburton Co. and Baker Hughes Inc. in the U.S. and by Technip SA for fellow French company CGG SA. Oil prices have a barrel, crimping revenue earned by major oil companies and prompting them to cut back on the projects oil services companies depend on.

Links: 360 Link to Full Text

Full text:

OSLO--Oslo-listed Seadrill Ltd. said Wednesday that it was suspending dividend payments to cut debt and to help finance possible acquisitions amid expectations that oil field services companies will consolidate as they battle fallout from weak oil prices.

"The decision to suspend the dividend has been a difficult decision for the board," said Seadrill Chairman John Fredriksen, but he said it was the right way to deal with a "significant deterioration in the broader offshore drilling and financing markets over the past quarter."

Seadrill said it aimed "to act as a consolidator as opportunities become available during this downturn." Mergers have been expected in the oil-services sector following a between Halliburton Co. and Baker Hughes Inc. in the U.S. and by Technip SA for fellow French company CGG SA.

Oil prices have a barrel, crimping revenue earned by major oil companies and prompting them to cut back on the projects oil services companies depend on.

On Wednesday Brent crude for January delivery was up 50 cents at $78.81 a barrel on ICE Futures Europe.

"Opportunities to buy distressed assets could probably surface at some point. By cutting dividends, Seadrill is better positioned to capitalize on this," said Sparebank1 Markets analyst Robert Andre Jensen. However, "it's hard to see many attractive distressed assets in the short term. We need to endure a longer period of weakness for this to happen."

Seadrill may have the best fleet and contract coverage among the larger oil drillers, but it still has a lot of debt and nearly $6 billion of newbuilds to pay for, Mr. Jensen said. To help secure future financing, Seadrill would have to show banks and creditors commitment, Mr. Jensen said. He forecasts the cyclical downturn in the rig market to continue at least into 2017.

By suspending its dividend, Seadrill expects its capital position to improve by $2 billion a year. The board has authorized a share buyback program of up to 10% of outstanding shares over the coming year.

"I am confident that Seadrill will emerge from this downturn even stronger and that we will resume our distributions in the future," Mr. Fredriksen said.

Seadrill's third-quarter net profit fell to $149 million, or $0.31 a share, from $286 million in the same period last year.

It didn't address the possible impact on its business from sanctions against Russia, which may affect $4.1 billion worth of rig contracts between its subsidiary North Atlantic Drilling and Russia's Rosneft. Its earnings report said only that there were "uncertainties" over the timing of drilling, which is set to begin between 2015 and 2017.

"Seadrill still reports the $4 billion associated with the Rosneft deal in its backlog, but the lights are starting to go out for a startup of drilling in 2015, as the Russian Arctic region is not a year-round market," said Mr. Jensen. He said Russia will be a potentially tough market for offshore drillers in coming years, "but it's increasingly difficult to see short-term upside from this, given the ongoing sanctions," he said.

Seadrill's shares were down 10% by midafternoon Wednesday.

Write to Kjetil Malkenes Hovland at

Credit: By Kjetil Malkenes Hovland

Subject: Petroleum industry; Oil service industry

Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Technip SA; NAICS: 541330; Name: Bak er Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 26, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1627993494

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627993494?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Asian Shares Mixed Before OPEC; Crude Oil Falls as Saudi Oil Minister Hints He Won't Push for Output Cuts

Author: Deng, Chao

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

China shares pushed to new highs in its sixth straight day of gains Thursday, while the rest of the region finished mixed ahead of a closely-watched meeting of oil producing countries in Vienna.

The Shanghai Composite Index was 1.0% higher at 2630.49, after breaking through 2600 yesterday for the first time since August 2011. The market has rallied 7.3% over the last six sessions, with much of those gains coming after last Friday's close when China's central bank surprised investors with an interest-rate cut.

Enthusiasm for Chinese stimulus was cooling in Hong Kong, however, where the Hang Seng Index was down 0.5% at 24004.28.

Elsewhere, the Nikkei Stock Average was down 0.8% to 17248.50, Australia's S&P/ASX 200 was up 0.1% at 5400.90 and Korea's Kospi was up 0.1% to 1982.09.

"The lack of a U.S. market influence will sap much of the energy from Japan stock trading, which itself is lacking incentives now that earnings reporting season is essentially over," said Mutsumi Kagawa, senior global strategist at Tokai Tokyo Research Center.

Overnight, stocks on but volumes were low ahead of the Thanksgiving holiday on Thursday. In Japan, volumes were at a tepid 2.06 billion shares.

Shares in Japan weakened as the U.S. dollar traded at ¥117.35, down from ¥117.74 late Wednesday in New York.

Auto-parts maker Takata Corp. lost 4.8% on its regulatory troubles in the U.S. Japanese officials in charge of automotive-safety recalls said Wednesday that in which in Japan, an indication that auto makers may have to expand vehicle recalls.

Crude-oil futures fell 1.0% to $72.96 a barrel, ahead of a meeting of the Organization of the Petroleum Exporting Countries. On Wednesday, Saudi Arabia's oil minister hinted he wouldn't push for . OPEC members have engaged in an unusually frantic round of shuttle diplomacy ahead of this week's gathering, with some poorer countries calling for deep supply cuts to boost oil prices, which have fallen by roughly 26% this year amid weak global demand and a glut of supply.

In Shanghai, new energy and environmental companies performed well after China's State Council strengthened the law relating to controlling air pollution. Guangdong Baolihua New Energy Stock Co. added 3% and Beijing SPC Environment Protection Tech Co. added 1.5%.

Daniel Inman contributed to this article.

Write to Chao Deng at

Credit: By Chao Deng

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 27, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628102464

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628102464?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Eurozone Bonds Soar to Record Highs on ECB Policy-Shift Hopes; Prices of Crude Tumble and Oil-related Company Stocks Drop After OPEC Decision

Author: Cox, Josie; Stubbington, Tommy

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

Eurozone government bonds soared to record highs Thursday, buoyed by growing expectations that the European Central Bank will buy sovereign debt to step up its efforts to stimulate the region's faltering economy.

Germany's 10-year bond yield fell to just above 0.7%, below the previous all-time low of 0.719% hit in October, according to Tradeweb. Yields in France, Spain and Italy touched all-time lows too. Bond prices rise when yields fall.

The moves follow a steady stream of comments from ECB officials indicating that the central bank is prepared to opt for more aggressive easing measures to boost below-target inflation.

, ECB President Mario Draghi said inflation in the eurozone is "very low" and "the governing council is unanimous in its commitment to using additional unconventional instruments within its mandate."

to Mr. Draghi's remarks. Several German states released their November consumer inflation estimates which--on average--were below economists' forecasts, while figures in Spain and Belgium showed falling prices too. Consumer price data for the eurozone as a whole are due Friday.

"The eurozone is facing a deflationary vortex due to a toxic combination of factors, [including] very low growth, under capitalized banks, very weak credit growth and imported deflation," says Philip Lawlor, chief investment strategist at Smith & Williamson.

The next ECB governing council news conference will take place on Thursday next week, and BNP Paribas strategists said that "every [data] release ahead of the meeting is likely to be watched even more closely than usual."

"Data remains one of the potential triggers for ECB action," they added.

The euro slipped 0.2% against the dollar to $1.2481, taking its losses against the buck so far this year to more than 9%.

Elsewhere, the price of oil continued to tumble, hitting a fresh four-year low after the Organization of the Petroleum Exporting Countries announced that it to remove some of the supply glut that has been pressuring prices in recent months.

Brent crude, which had been lower all day, was down around 6% after the decision was announced, at $73.09 per barrel. That takes losses so far this year to over 32% and since the start of November to almost 13%. Nymex crude has also dropped heavily, falling 5.7% to $69.50.

"We have stated for the past couple of weeks that if there was no agreement to cut [either] the production target or the real production, the Brent price will probably fall down into the 60s [dollar per barrel] before Christmas," Torbjørn Kjus, an oil analyst at DNB Bank wrote in a note adding that the meeting was as "bearish" as it possible could have been.

"This is also a strong signal that the market will be left to itself," he said.

Oil-related stocks took a beating too.

Shares in BG Group PLC were down 5%. Royal Dutch Shell PLC and Total SA lost 3.8% and 3.9% respectively. The Stoxx Europe 600 Oil & Gas index lost down 2.6%. London's FTSE 100, one of Europe's indexes with the highest exposure to the oil and gas industry, was flat on the day, underperforming the core European indexes.

In currency markets, the Canadian dollar hit a day's low against the U.S. dollar while the Norwegian krone slumped to a day's low against the euro.

The ruble, which has additionally been battered by geopolitical tensions and sanctions this year, hit an all-time low versus the euro and is hovering near an all-time low against the dollar too.

Write to Josie Cox at and Tommy Stubbington at

Credit: By Josie Cox And Tommy Stubbington

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 27, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628173202

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628173202?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

OPEC's Weapon of Mass Inaction; It will likely be years before we see triple-digit oil again

Author: Denning, Liam

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Nov 2014: n/a.

ProQuest document link

Abstract:

Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, has a beef with a number of oil-market participants.

Links: 360 Link to Full Text

Full text:

OPEC just declared war on everyone-including itself.

The oil cartel's hotly-anticipated meeting on Thursday : No change to an output target that already wasn't being observed. Oil prices, though, went bang: Brent crude fell 4% to close at $73 a barrel after the decision was made. It will likely be years before we see triple-digit oil again.

Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, has a beef with a number of oil-market participants. It also appears to have woken up to the fact that OPEC has once again lost its grip on prices.

Saudi Arabia's chief antagonist is fellow OPEC member, and main geopolitical rival, Iran. Lower oil prices squeeze Iran's finances and capacity to oppose Riyadh's aims in regional warzones such as Syria. As an added bonus, lower oil prices also hurt non-member Russia, another antagonist. The ruble fell another 2.5% against the dollar today.

Beyond geopolitics, Saudi Arabia must simply try to reassert its primacy in the market. For much of the past decade, OPEC seemed to be in the driving seat. In reality, high prices, particularly in recent years, partly reflected OPEC's inability to ensure adequate supply in the face of strong demand from emerging markets such as China. The eventual result is as old as commodity markets themselves: efforts to mitigate demand and a surge in alternative supplies, especially from the U.S.

Saudi Arabia must try to preserve the value of its reserves still in the ground: 266 billion barrels on a proven basis alone. Cutting output might juice oil prices in the short term, but would also give U.S. producers an incentive to keep drilling and consumers to keep conserving. What is more, many OPEC members, along with Russia, would free-ride off others' cuts and keep pumping. Even an announcement of a big cut on Thursday might not have helped since OPEC rarely sticks to quotas.

Saudi Arabia must instead try to maintain its own credibility. And unlike many other OPEC members, it used the good times to build up its foreign exchange reserves: $745 billion in September, enough to cover more than 30 months of imports, according to Barclays.

As Riyadh seeks to counter geopolitical rivals, slow shale development and undermine efforts to conserve demand, it has a formidable war chest to deploy. For once, though, all that money and all that conflict will be weighing on oil prices, not boosting them.

Credit: By Liam Denning

Subject: Petroleum industry; Crude oil prices; Geopolitics

Location: Riyadh Saudi Arabia Iran Syria

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 27, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628305188

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628305188?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Australian Shares Slump After OPEC Decision; Oil Prices Dive, Sending Energy Stocks Sharply Lower

Author: Stewart, Robb M; Deng, Chao

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

The 12-member Organization of the Petroleum Exporting Countries, which collectively pump around one-third of the world's oil, agreed on Thursday to stick to a current target of pumping 30 million barrels a day.

Links: 360 Link to Full Text

Full text:

Energy stocks pulled Australia's market sharply lower early Friday after the world's biggest oil-producing nations , sending crude prices into a tailspin.

Elsewhere in the Asia-Pacific region, stocks traded mixed.

Australia's S&P ASX 200 was down 1.3% to 5333, as crude-oil futures fell 6.8% to $68.68 a barrel.

Santos was among the sharpest fallers in the energy sector with a tumble of more than 10%, while larger Woodside Petroleum was down 6%. Elsewhere in the sector, Oil Search shed 7.6% and Origin Energy dropped 6.2%.

"It seems there were still plenty of traders holding out hope that the supply of oil from the world's largest group of producers would be cut," said Scott Schuberg, chief executive at Rivkin Securities in Sydney, adding that alongside the fall in iron-ore prices this year it means even fewer reasons for Australia's central bank to consider lifting interest rates.

Stocks elsewhere in the region were mixed amid an absence of cues from the U.S., where the market was closed for the Thanksgiving holiday Thursday.

Tokyo shares edged higher after the latest economic data showed in October. Industrial production improved again in October, rising 0.2% from a month earlier. The Nikkei Stock Average rose 0.6% to 17350.89.

Still, Japan's inflation rate fell below 1% for the first time in a year. The core consumer-price index, which strips out volatile fresh-food prices, was down last month to 0.9%, moving further away from the 2% level targeted by Prime Minister Shinzo Abe and the Bank of Japan.

Among other markets, South Korea's Kospi was down 0.3% at 1976.07 and Singapore's Straits Times Index was flat at 3343.2.

Write to Robb M. Stewart at and Chao Deng at

Credit: By Robb M. Stewart And Chao Deng

Subject: Petroleum industry; Stock exchanges; Consumer Price Index; Price increases

Location: Australia

People: Abe, Shinzo

Company / organization: Name: Woodside Petroleum Ltd; NAICS: 211111; Name: Bank of Japan; NAICS: 521110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628383023

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628383023?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Eurozone Bonds Soar to Records on ECB Policy-Shift Hopes; Prices of Crude Tumble and Oil-related Company Stocks Drop After OPEC Decision

Author: Cox, Josie; Stubbington, Tommy

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

Eurozone government bonds soared to records Thursday, buoyed by growing expectations that the European Central Bank will buy sovereign debt in a fresh effort to stimulate the region's faltering economy.

In equity markets, the Stoxx Europe 600 index rose 0.3% to 347.49, but oil-related stocks took a beating.

And in Asia, the Shanghai Composite pushed to a three-year high in a sixth straight session of gains, while the rest of the region ended mixed ahead of the outcome of a meeting of oil-producing countries later in the global day.

Germany's 10-year bond yield fell to roughly 0.7%, a new all-time low, according to Tradeweb. Yields in France, Spain and Italy touched all-time lows, too. Yields fall when bond prices rise.

The moves follow a steady stream of comments from ECB officials indicating that the central bank is prepared to opt for more-aggressive easing measures to boost below-target inflation.

, ECB President Mario Draghi said inflation in the eurozone is very low and "the governing council is unanimous in its commitment to using additional unconventional instruments within its mandate."

to Mr. Draghi's remarks. Several German states released their November consumer-inflation estimates, which, on average, were below economists' forecasts, while figures in Spain and Belgium also showed falling prices. Consumer-price data for the eurozone as a whole are due out Friday.

"The eurozone is facing a deflationary vortex due to a toxic combination of factors, [including] very low growth, undercapitalized banks, very weak credit growth and imported deflation," said Philip Lawlor, chief investment strategist at Smith & Williamson.

Portfolio managers at Schroders said that in Europe, the next few years would be characterized by lower returns, more volatility and greater risk. "To try and summarize consensus expectations for growth in 2015, we would say that investors are very optimistic about the U.S. and to a lesser extent the U.K., are willing to give Japan and much of Asia the benefit of the doubt for now, and hate Europe full-stop," they wrote in a note to clients.

The next ECB governing council news conference will occur on Thursday in the coming week, and BNP Paribas strategists said that "every [data] release ahead of the meeting is likely to be watched even more closely than usual."

On Thursday, the euro slipped 0.3% against the U.S. dollar to $1.2467, taking its losses against the greenback so far this year to more than 9%.

Currencies from economies that depend heavily on oil slid. The Russian ruble, which has also been battered by geopolitical tensions and sanctions, hit all-time intraday lows against both the euro and the dollar.

In stock trading, the Stoxx Europe 600 Oil & Gas index lost 3.95%, while London's FTSE 100--one of Europe's indexes with the highest exposure to the oil and gas industry--sank 0.1%, underperforming the core European indexes. BG Group fell 6% and Royal Dutch Shell lost 4.3% in London trading, and Total slid 4.1% in Paris.

Germany's DAX rose 0.6% to 9974.87 and the CAC-40 added 0.2% today to 4382.34.

In Asian trading, the Shanghai Composite rose 1% to 2630.49, after breaking through 2600 on Wednesday for the first time since August 2011. The market has rallied 7.3% over the past six sessions, with much of those gains coming after last Friday's close, when China's central bank surprised investors with an interest-rate cut.

In Shanghai, new energy and environmental companies performed well after China's State Council strengthened the law relating to controlling air pollution. Guangdong Baolihua New Energy Stock added 3% and Beijing SPC Environment Protection Tech rose 1.5%.

In Hong Kong, enthusiasm for Chinese stimulus was cooling, leaving the Hang Seng Index down 0.4% at 24004.28.

Japan's Nikkei Stock Average slipped 0.8% to 17248.50, with shares weakening as the U.S. dollar traded at ¥117.35 in Asia, down from ¥117.74 late Wednesday in New York. The dollar was at ¥117.72 late Thursday in New York.

In Japanese trading Thursday, auto-parts maker Takata lost 4.8% on its regulatory troubles in the U.S. Japanese officials in charge of automotive-safety recalls said Wednesday they learned of a new case in which an air bag made by Takata exploded in a vehicle in Japan, an indication that auto makers may have to expand vehicle recalls.

Australia's S&P/ASX 200 rose 0.1% to 5400.90 and Korea's Kospi was up 0.06% to 1982.09. India's Sensex Index gained 0.2% to 28438.91.

Elsewhere, oil took center stage as it tumbled to a more-than-four-year low after the Organization of the Petroleum Exporting Countries said it despite a supply glut having triggered a relentless slide in prices over recent months.

Brent crude fell 6.6% to $72.58 a barrel on the ICE Futures Europe exchange, putting losses for the year so far at 34%. Light sweet crude fell $4.64, or 6.3%, to $69.05 a barrel as electronic trading on the New York Mercantile Exchange halted at 1 p.m. EST.

"We have stated for the past couple of weeks that if there was no agreement to cut [either] the production target or the real production, the Brent price will probably fall down into the 60s [dollars a barrel] before Christmas," Torbjørn Kjus, an oil analyst at DNB Bank wrote in a note, adding that the meeting was as "bearish" as it possible could have been.

"This is a strong signal that the market will be left to itself," he said.

Chao Deng contributed to this article.

U.S. Stocks at Records

U.S. markets were shut Thursday for Thanksgiving. On Wednesday, the Dow and S&P 500 ended at records in a quiet session.

The Dow Jones Industrial Average rose 12.81 points, or 0.1%, to 17827.75. The S&P 500 gained 5.8 points, or 0.3%, to 2072.83.

Deep-water drilling companies fell the most on the S&P. Diamond Offshore Drilling shares slid 11%; Transocean fell 8.1%.

The Nasdaq Composite Index rose 29.07 points, or 0.6%, to 4787.32. U.S. stock and bond markets will close early Friday.

Write to Josie Cox at and Tommy Stubbington at

Credit: By Josie Cox And Tommy Stubbington

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628383031

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628383031?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Tumble to Five-Year Lows; OPEC Keeps Output Goal Unchanged, Suggesting Continuing Glut of Crude

Author: Puko, Timothy

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

Declining import demand from the world's No. 1 oil consumer has had ripple effects through the global oil market, creating a glut in some corners that has pushed down prices.\n

Links: 360 Link to Full Text

Full text:

Oil prices tumbled Friday, plumbing five-year lows, following an OPEC decision that will likely translate into a lingering glut of crude.

Brent crude, the global benchmark, fell $2.43, or 3.4%, at $70.15 a barrel on ICE Futures Europe, its lowest settlement since May 2010. Friday's selloff added to losses on Thursday, a regular trading day in Europe, when Brent plunged 6.7% to settle at its lowest level since August 2010. It also dipped below $70 a barrel in intraday trading for the first time since May 2010.

U.S. oil futures, which didn't close on Thursday due to the Thanksgiving holiday, fell $7.54, or 10.2%, from Wednesday's close, at $66.15 a barrel on the New York Mercantile Exchange. It was the lowest settlement since September 2009.

Both benchmarks are in the middle of their longest month-to-month losing streaks since the financial crisis roiled markets five years ago. November brought 18% losses to both, the largest since the fall of 2008.

Traders and analysts said it would take a major geopolitical flare-up or a large disruption to production to shift the trajectory of oil prices, which have plunged more than 30% year-to-date due in part to rising output in the U.S. and Libya. Small gains earlier Friday morning came from profit-taking and weren't a sign of a recovery, they said.

At its most widely watched meeting in years, the 12 members of Organization of the Petroleum Exporting Countries at 30 million barrels a day, more than a third of global oil output. The move could cut about 300,000 barrels that OPEC nations have been producing beyond their quota. OPEC rejected calls for more drastic action to curtail supplies.

"I don't see anything bullish out there right now that could take it higher," said Todd Gross, chief investment officer at QERI LLC in New York. "There's still more potential for downside risk."

Although the move to maintain the production ceiling is painful for the budgets of many OPEC members, some analysts see it as an effort to step up competition from producers in U.S. shale-rock formations. The U.S. shale-oil boom has led to a rapid increase in U.S. crude production, which topped 9 million barrels a day in November for the first time since 1986.

It will likely take months for falling prices to result in production declines, which in turn could eventually support prices, analysts say. Sluggish demand, ongoing expansions of some fields and the possibility of more Iranian oil on the market could actually increase stockpiles in the months to come, they say.

"I don't have any confidence that we're at the floor," said Tim Evans, analyst at Citi Futures Perspective in New York.

The latest leg down in oil prices cascaded through financial markets. and currencies of countries, such as Russia, Canada and Norway, that are big oil exporters. Meanwhile, share prices of large fuel consumers, such as airlines, benefited.

"No basin is safe in a $70 (a barrel) market," energy investment bank Tudor, Pickering, Holt & Co. said in a note Friday. At these prices, the Houston firm expects U.S. supply growth would just about stop by 2016, with unconventional drilling fields including the Bakken, Mississippian Lime, Cleveland, Tonkawa, Marmaton, and Tuscaloosa Marine Shale the most likely to lose drilling rigs.

As the U.S. has ramped up production, it has cut back on imports. Declining import demand from the world's No. 1 oil consumer has had ripple effects through the global oil market, creating a glut in some corners that has pushed down prices.

In a research note, analysts at Morgan Stanley said the market has lost "the OPEC put"--the idea that OPEC would step in to support prices. As a result, oil prices are likely to be even lower in 2015 than widely predicted, the analysts said.

If OPEC continues to refrain from using its influence, "we believe oil will enter a new paradigm where prices are subject to the swings of normal commodity cycles with much higher volatility," they wrote.

December reformulated gasoline blendstock, or RBOB, settled down 13.12 cents, or 6.5%, to $1.9039 a gallon in two days of trading.

December diesel has fallen 16.57 cents, or 6.9%, to $2.2308 a gallon in two days of trading.

Write to Timothy Puko at

Credit: By Timothy Puko

Subject: Petroleum industry; Futures; Crude oil prices

Location: United States--US Europe

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628400912

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628400912?accountid=7117

Last updated: 2017-11-21

Database: The Wall Str eet Journal

Eurozone Bond Yields Fall to Record Lows --- Chinese Stocks Add to Recent Gains; Oil Tumbles to More-Than-Four-Year Trough as OPEC Maintains Output Ceiling

Author: Cox, Josie; Stubbington, Tommy

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Nov 2014: C.4.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

In equity markets, the Stoxx Europe 600 index rose 0.3% to 347.49, but oil-related stocks took a beating.

And in Asia, the Shanghai Composite Thursday pushed to a three-year high in a sixth straight session of gains, while the rest of the region ended mixed ahead of the outcome of a meeting of oil-producing countries later in the global day.

Germany's 10-year bond yield fell to roughly 0.7%, a new all-time low, according to Tradeweb. Yields in France, Spain and Italy touched all-time lows, too. Yields fall when bond prices rise.

The moves follow a steady stream of comments from ECB officials indicating that the central bank is prepared to opt for more-aggressive easing measures to boost below-target inflation.

Speaking at Finland's parliament on Thursday, ECB President Mario Draghi said inflation in the eurozone is very low and "the governing council is unanimous in its commitment to using additional unconventional instruments within its mandate."

Data on Thursday added urgency to Mr. Draghi's remarks. Several German states released their November consumer-inflation estimates, which, on average, were below economists' forecasts, while figures in Spain and Belgium also showed falling prices.

On Thursday, the euro slipped 0.3% against the U.S. dollar to $1.2467, taking its losses against the greenback so far this year to more than 9%.

Oil took center stage as it tumbled to a more-than-four-year low after the Organization of the Petroleum Exporting Countries said it would maintain its production ceiling despite a supply glut having triggered a relentless slide in prices over recent months.

In stock trading, the Stoxx Europe 600 Oil & Gas index lost 3.95%, while London's FTSE 100 -- one of Europe's indexes with the highest exposure to the oil and gas industry -- sank 0.1%, underperforming the core European indexes. BG Group fell 6% and Royal Dutch Shell lost 4.3% in London trading, and Total slid 4.1% in Paris.

Germany's DAX rose 0.6% to 9974.87 and the CAC-40 added 0.2% today to 4382.34.

In Asian trading Thursday, the Shanghai Composite rose 1% to 2630.49, after breaking through 2600 on Wednesday for the first time since August 2011. The market has rallied 7.3% over the past six sessions, with much of those gains coming after last Friday's close, when China's central bank surprised investors with an interest-rate cut.

In Hong Kong, enthusiasm for Chinese stimulus was cooling, leaving the Hang Seng Index down 0.4% at 24004.28.

Japan's Nikkei Stock Average slipped 0.8% to 17248.50, with shares weakening as the U.S. dollar traded at 117.35 yen in Asia, down from 117.74 yen late Wednesday in New York. The dollar was at 117.72 yen late Thursday in New York.

Early Friday, Australia's S&P/ASX was down 1.4%, pulled lower by energy stocks after the OPEC decision. Japan's Nikkei Stock Average was up 0.9% after the government reported an improvement in industrial production. Hong Kong's Hang Seng was off 0.3%.

U.S. Stocks at Records

U.S. markets were shut Thursday for Thanksgiving. On Wednesday, the Dow and S&P 500 ended at records in a quiet session.

The Dow Jones Industrial Average rose 12.81 points, or 0.1%, to 17827.75. The S&P 500 gained 5.8 points, or 0.3%, to 2072.83.

Deep-water drilling companies fell the most on the S&P. Diamond Offshore Drilling shares slid 11%; Transocean fell 8.1%.

The Nasdaq Composite Index rose 29.07 points, or 0.6%, to 4787.32. U.S. stock and bond markets will close early Friday.

Credit: By Josie Cox and Tommy Stubbington

Subject: World markets (wsj)

Location: Germany United States--US Spain Italy Asia France

Classification: 9180: International; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.4

Publication year: 2014

Publication date: Nov 28, 2014

column: World Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628429263

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628429263?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Plunge As OPEC Stays Put

Author: Faucon, Benoit; Said, Summer; Kent, Sarah

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Nov 2014: A.1.

ProQuest document link

Abstract:

The 12-member Organization of Petroleum Exporting Countries, who collectively pump more than one-third of the world's oil, agreed at their meeting in Vienna to stick to the group's current target of producing 30 million barrels a day. Since the cartel is currently pumping more than its ceiling, the decision -- backed by a commitment from OPEC members to comply with it -- implies a cut of around 300,000 barrels a day, based on OPEC's own figures.

Links: 360 Link to Full Text

Full text:

VIENNA -- OPEC members rejected calls for drastic action to cut their oil output, keeping their production ceiling unchanged and suggesting the cartel is bracing for lower prices longer term.

The decision on Thursday sent crude prices into a tailspin and spilled into currency and European stock markets. If Thursday's market rout proves lasting, it will provide more relief to consumers in gasoline-guzzling countries like the U.S. But it is hammering the finances of big oil producers, from Russia to Venezuela, and biting into profit at oil companies big and small.

Since the cartel is currently pumping more than its ceiling, the decision -- backed by a commitment from OPEC members to comply with it -- implies a cut of around 300,000 barrels a day, based on OPEC's own figures. That would put only a relatively small dent in global oil supply even if implemented, and the group has exceeded its ceilings most quarters since late 2011.

The decision sent oil prices tumbling, with the West Texas Intermediate benchmark falling below $70 a barrel for the first time in more than four years. Oil for January delivery fell $4.64, or 6.3%, to $69.05 a barrel as electronic trading on the New York Mercantile Exchange halted at 1 p.m. Thursday. The Nymex floor was closed Thursday in observance of Thanksgiving. The global Brent contract for January fell $5.17, or 6.7%, to $72.58 a barrel on the ICE Futures Europe exchange.

Currencies of major oil producing countries slid, with the Russian ruble hitting a record low against the euro and nearing an all-time low against the dollar. Share prices of major European oil companies dived, with Royal Dutch Shell PLC down 4.3%, Total SA off 4.1% and BP falling 2.7%.

OPEC Secretary-General Abdalla Salem el-Badri said he was sure OPEC members would "abide by" the group's production target. But faced with a gusher of new oil supply -- mainly from the U.S. shale revolution -- and weaker global oil demand, OPEC's muted response caused some to question the five-decade old cartel's relevance.

Analysts had estimated OPEC would need to take 1 million to 1.5 million barrels a day off the market to support oil prices, which have fallen by more than 30% since the summer.

"OPEC is clearly signaling that it will no longer bear the burden of market adjustment alone and this decision puts the onus on other producers, especially U.S. tight oil, to adjust as well," oil analysts at Barclays said.

The absence of stronger OPEC action makes a rebound in oil prices less probable, putting more strain on oil-producing countries which became used to oil prices above $100 a barrel for much of the time since early 2011. Among OPEC's members, only Qatar and Kuwait will be able to balance their budgets next year with prices at their current level.

The biggest losers from the current price trend could include Russia, which is already suffering from an economic slowdown and feeling the effects of both lower oil revenues and Western sanctions imposed because of the Ukraine conflict.

But the drop in prices has helped consumers in developed countries such as the U.S. heading into the holiday shopping season. Lower prices at the pump and on heating bills give consumers more money for discretionary items such as restaurant meals, electronics and haircuts.

The decline in gas prices over the last six months is equivalent to a $75 billion tax cut in the U.S., said economists at Goldman Sachs Wednesday. Falling fuel prices also reduce production and shipping costs for U.S. manufacturers, farmers and businesses.

The national average for regular gasoline fell to a four-year low of nearly $2.80 a gallon on Thursday, according to auto club AAA. Gas prices were as high as $3.68 at the end of June.

Cheaper oil is a rare piece of good news too for Europe's biggest economic bloc, the euro currency area, since the region is a big oil importer. Lower oil prices, though slightly offset by the euro's weakening against the dollar, should boost the spending power of Europe's consumers, still suffering from high unemployment amid the eurozone's long slump.

Many of Asia's emerging economies are also oil importers and thus stand to benefit. Falling oil prices are "a real boon for some countries in Asia, including India, which has a fragile current-account situation," says Eric Chaney, global chief economist at AXA Group in Paris.

OPEC's relative inaction, meanwhile, leaves the oil industry, particularly U.S. producers, "in this waiting game, like a game of chicken," said Nasdaq energy analyst Tamar Essner.

While some, including ConocoPhillips Co., have already announced plans to spend less in 2015, many won't unveil next year's budget for several weeks.

OPEC's production target rollover is a compromise solution designed to meet the conflicting pressures on its members. Though OPEC has been through periods of intense infighting, longtime observers say the group has rarely been as divided as during the weeks running up to Thursday's meeting.

While most OPEC countries want to see global oil supply reduced to help boost prices, most members have been unwilling to cut their own production for fear of losing crucial oil-related income and market share.

Venezuela, which will need oil prices at $117.50 a barrel to balance its government budget next year according to Deutsche Bank, proposed a sharp output cut, according to people familiar with the meeting. Beforehand its representative Mr. Ramirez told reporters he wanted two million barrels a day of oversupply out of the market. That idea was aggressively opposed by OPEC's Gulf members.

---

Nick Timiraos, Nicole Lundeen and Marcus Walker contributed to this article.

Credit: By Benoit Faucon, Summer Said and Sarah Kent

Subject: Petroleum production; Gasoline prices; Petroleum industry; Crude oil prices

Location: United States--US Russia

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910

Classification: 9180: International; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.1

Publication year: 2014

Publication date: Nov 28, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628429474

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628429474?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Russian Ruble Falls to New Lows as Oil Prices Slide; Bank of Russia Extends Currency Swap Limits to Stabilize Ruble

Author: Ostroukh, Andrey

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

NEW YORK--The Russian ruble weakened to a record low Friday, as it continued to struggle under falling oil prices after OPEC members rejected calls for drastic action to cut their oil output.

Links: 360 Link to Full Text

Full text:

NEW YORK--The Russian ruble weakened to a record low Friday, as it continued to struggle under falling oil prices after OPEC members rejected calls for drastic action to cut their oil output.

The ruble touched a fresh low, with 50.03 rubles required to buy one dollar in afternoon trade during the New York session, before recovering slightly to 49.98. This takes the ruble's year-to-date depreciation against the dollar to 34%.

Responding to the currency's sharp decline, the Bank of Russia said it would extend limits on currency swaps in an effort to stabilize the ruble.

The decision by the Organization of the Petroleum Exporting Countries to keep its production ceiling unchanged sent Brent crude prices below $70 per barrel in intraday trading for the first time since May 2010. The slump in oil prices threatens to further slow Russia's embattled economy as around 50% of the country's annual budget revenue stems from oil and gas exports.

Against the euro, the ruble eased to 62.24 before recovering slightly to 62.16.

The Bank of Russia against the dollar and euro since early November, having previously intervened on currency markets to stem its loss in value.

Russia's central bank had set a daily limit of $2 billion for currency-swap operations, where banks receive rubles from the regulator using dollars and euros as collateral. This tool drew demand only recently after the central bank withdrew a large chunk of rubles from the interbank market as a result of $30 billion intervention in October.

By extending the limit for the next two weeks on Friday, the central bank said it hopes to deter speculators from betting on a weaker ruble.

The central bank had warned that it might intervene in the markets in future to prop up the ruble, if it deemed it necessary for the sake of Russia's financial stability.

Write to Andrey Ostroukh at

Credit: By Andrey Ostroukh

Subject: Rubles; Central banks; Petroleum industry; Energy economics; Crude oil prices

Location: Russia

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628453090

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628453090?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

OPEC Decision Roils Markets; Oil-Linked Stocks and Currencies Hammered

Author: Cox, Josie; Albanese, Chiara

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

Biggest losers on the pan-European all-share index included BG Group PLC, Petrofac Ltd., Royal Dutch Shell PLC and BP PLC. London's FTSE 100 index, which has a high exposure to the energy sector, fell 0.3% while Germany's DAX was down 0.1% and France's CAC declined 0.2%.\n

Links: 360 Link to Full Text

Full text:

The hammered commodity-dependent currencies as well as shares in oil and gas companies Friday, a day after the Organization of the Petroleum Exporting Countries , diminishing hope of any imminent respite for the ailing commodity.

Brent crude was an additional 0.6% lower at $72.17 a barrel, its weakest level in four years, having nearly 7% on Thursday.

"It's really a chaotic situation and anyone's guess how far oil might still go," said James Sutton, global natural resources equity strategist at J.P. Morgan Asset Management, which looks after around $1.7 trillion worth of assets.

The sell-off in oil-related stocks continued in the U.S., where markets reopened Friday after the Thanksgiving holiday there. Oil majors like Exxon Mobil Corp. and drillers such as Transocean Ltd. were feeling the pressure.

"In recent weeks we have reduced our exposure to energy and increased our cash holdings and certainly won't be comfortable deploying that cash again before we see some kind of equilibrium returning to the market," Mr. Sutton said.

Analysts had estimated OPEC would need to take 1 million to 1.5 million barrels a day off the market to support oil prices, which have fallen by more than 30% since the summer, but its members didn't bow to market pressure.

which this year has also been pummeled by geopolitical tensions and resulting sanctions, hit yet another all-time low against the dollar, while fellow oil-linked currencies such as the Canadian dollar, Norway's krone and Nigeria's naira slipped too.

One dollar now buys more close to 50 rubles. It started the year around 32.

"OPEC yesterday delivered just about the most unfriendly possible response to ruble and oil prices," Tom Levinson, a strategist at Sberbank said. He added that it was unclear whether Russia's central bank would intervene to curb the currency's slide.

"[That will] be dictated by the bank's judgment of whether "financial stability" is at risk. It is hard to argue that it is not, but the hurdle to ad hoc intervention has proven high to date," Mr. Levinson said.

Barclays economists said they now expect Brent crude to sink below $70 a barrel and the West Texas Intermediate benchmark to fall even further.

"Over the course of the coming months, oil markets will have to find a new equilibrium--a world where demand elasticities are tested, and non-OPEC supply sensitivities, and particularly the pain threshold for U.S. producers becomes better understood," they wrote in a note.

Turkey, a major oil importer, is a bright spot. Aberdeen Asset Management said it is now taking a more favorable view of the country by buying the Turkish lira.

"There can be a shift from oil-exporter countries, we are already witnessing it in Latin America's weaker growth performance. But on a macro scale, lower energy prices should help global growth, and this should have an overall positive impact on emerging markets," said Viktor Szabo, a portfolio manager at the firm, which manages around £322.5 billion ($402 billion) in assets.

Istanbul's main stock exchange rose around 1.8% on Friday.

"Given that Turkey imports more than 90% of its energy needs, low oil prices will have positive implications," said emerging market strategist Piotr Matys at Rabobank.

Shares in major airlines, including easyJet PLC, International Consolidated Airlines--owner of British Airways--and TUI Travel PLC climbed, buoyed by the prospect of cheaper fuel. The Stoxx Europe 600 index of travel and leisure stocks rose 1.4%.

"A fall in oil prices means a fall in petrol prices, a fall in transport costs, and should be treated as a tax cut for consumers," Peter Dragicevich, a strategist at Commonwealth Bank of Australia wrote in a note.

Retail stocks and chemical companies are also widely seen as potential beneficiaries.

But more broadly, oil and gas companies on the Stoxx Europe 600 index declined by almost 3.5% to a more than one-month low, fiercely underperforming all other sector indexes. The broader Stoxx 600 fell 0.1%.

The biggest losers on the pan-European all-share index included BG Group PLC, Petrofac Ltd., Royal Dutch Shell PLC and BP PLC.

Write to Josie Cox at and Chiara Albanese at

Credit: By Josie Cox and Chiara Albanese

Subject: Petroleum industry; Stock exchanges; Energy economics; American dollar; International trade; Elasticity of demand; Crude oil prices; Energy industry; Natural gas utilities

Location: Russia

Company / organization: Name: Sberbank; NAICS: 522110; Name: easyJet Airline Co Ltd; NAICS: 481111; Name: Aberdeen Asset Management; NAICS: 523920

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628478944

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628478944?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Dozens Killed in Sudan Clashes; Security Scare Hits Oil-Producing Region

Author: Bariyo, Nicholas

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

Mr. Bashir is facing an arrest warrant issued by the International Criminal Court over accusations of war crimes and genocide committed by his troops and allied militias.

Links: 360 Link to Full Text

Full text:

Dozens of people have been killed in clashes between rival tribes in Sudan's West Kordofan state, officials said Friday, in the latest security scare to hit the country's restive oil-producing region.

Conflicts over grazing land pitted two rival groups of the Arab Misseriya tribe against each other, leaving at least 140 people dead and more than 100 others injured after several days of clashes, Rabie Abdelaty, spokesman for Sudan's information ministry, told The Wall Street Journal.

Several Arab tribes acquired arms from the Khartoum regime several years ago to help in the quelling of an insurrection by non-Arab tribes in the neighboring region of Darfur. But tribal groups are increasingly turning the guns against each other, posing a renewed security challenge for President Omar al-Bashir's beleaguered government.

"The military has sent a response team to the region" Mr. Abdelaty said. "The casualties are overwhelming"

Gun-wielding tribal militias have conducted tit-for-tat raids against each in recent months, threatening to unsettle the stability of the area, which accounts for the bulk of Sudan's 130,000 barrels a day of crude oil production.

The nomadic Misseriya often move with large herds along Sudan's common border with the newly independent South Sudan and have in recent years raided non-Arab tribes in the disputed region of Abyei, stirring tensions between Juba and Khartoum.

Sudan lost around 75% of its oil fields following the breakaway of South Sudan in 2011 and now relies on oil fields in Western and Northern Kordofan states for the bulk of its crude.

For nearly two decades, the Sudanese military has been battling multiple rebellions in its southern regions.

Earlier this week, Sudan closed down the human rights office of the joint United Nations-African Union peacekeeping mission in Darfur after accusations that its troops had conducted mass rapes in the region.

Mr. Bashir is facing an arrest warrant issued by the International Criminal Court over accusations of war crimes and genocide committed by his troops and allied militias. Khartoum denies the accusations.

Write to Nicholas Bariyo at

Credit: By Nicholas Bariyo

Subject: Oil fields; Militia groups; Petroleum production

Location: Sudan Darfur Sudan South Sudan

People: Bashir, Omar Hassan Ahmed

Company / organization: Name: United Nations--UN; NAICS: 928120; Name: African Union; NAICS: 813940; Name: International Criminal Court; NAICS: 922110, 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628509151

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628509151?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Malaysia's Petronas to Review Spending as Oil Prices Slide; State-Run Petronas May Also Trim Dividend Payments to Malaysian Government

Author: Ng, Jason

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

KUALA LUMPUR--Malaysia's national oil-and-gas company Petroliam Nasional Bhd., or Petronas, said Friday it is reviewing its spending plans for next year after reporting a 14% decline in third-quarter net profit on falling crude prices, even as it increased output.

Links: 360 Link to Full Text

Full text:

Petronas, the Southeast Asian country's sole Fortune 500 company and most profitable enterprise, may cut spending between 15% and 20% of its capital expenditure next year, Chief Executive Shamsul Azhar Abbas told reporters at an earnings briefing. The company typically spends 60 billion ringgit to 80 billion ringgit ($17.9 billion to $23.9 billion) each year in expanding its operations.

Petronas may also trim dividend payments to the government next year if prices continue to fall. "We need to channel income" into capital expenditure, Mr. Shamsul said. Malaysia's government depends heavily on Petronas as a source of revenue, with the company contributing around $10 billion each year to the national budget.

The company's net profit for the three months ended Sept. 30 was 12.41 billion ringgit, down from 14.47 billion ringgit during the same quarter last year. Revenue fell 1.3% from a year earlier at 80.37 billion ringgit from 81.41 billion ringgit. Its crude output rose 6.5% to 822,000 barrels a day.

Petronas said in a statement that fourth-quarter operational earnings "will likely be considerably lower" than in the third quarter.

Oil prices have fallen more than one-third since June due to oversupply and weak global demand. Brent--the global benchmark for crude--recently fell below $72 a barrel for the first time since mid-2010. Malaysia relies heavily on the oil and gas sector for government revenue, filling up 31% of its coffers last year.

Still, the company says it hopes to press ahead with its Canadian liquefied-natural-gas project, which could cost as much as 11 billion Canadian dollars (US$10 billion). Mr. Shamsul said Petronas expects to make its final decision on the proposed Canadian investment by the end of the year, as previously scheduled, after securing regulatory approval, financing and project partners.

The project includes an export terminal at an undeveloped island in northern British Columbia. It could begin operating as soon as 2018, and is projected to export up to 12 million metric tons of LNG a year, mostly to Asian markets.

Write to Jason Ng at

Credit: By Jason Ng

Subject: Petroleum industry; Corporate profits; Natural gas; Regulatory approval

Location: Malaysia

Company / organization: Name: Petronas; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628509156

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628509156?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

OPEC Decision Eases Pain for Japanese Airlines and Importers as Oil Prices Drop; Japan's Nikkei Stock Average Rose 1.2% on Friday

Author: Fujikawa, Megumi

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

TOKYO--The decision by the world's leading oil producers to caused oil prices to drop and gave a boost to Japanese airlines, as well as a much-needed break to companies in Japan that rely on materials brought in from overseas.

Japan Airlines and ANA Holdings, the parent of All Nippon Airways Co., both rallied on the Tokyo Stock Exchange as oil prices fell on Friday, with hopes that the cost of jet fuel, which makes up about 30% of their operating expenses, will head lower.

JAL's shares rose 5.3% to ¥3,490 ($29.65) at Friday's close, while ANA gained 7.4% to ¥292.2. The Nikkei Stock Average rose 1.2% to 17459.85.

"Though it may hurt some sectors, lower oil prices are positive for the overall market," said Yusuke Sakai, a senior trader at T&D Asset Management. He added that declines in fuel costs will help spur industrial production and consumer spending, supporting the Japanese and U.S. economies.

A falling oil price also helps smaller companies in Japan that have been struggling as the weakening yen has made imported materials more expensive. A survey by the Japan Chamber of Commerce and Industry released Friday said about 39% of Japanese companies expected their profit to decline in the fiscal year through March if the yen stayed at current levels of around ¥116-¥118.

"A weaker yen hurts small and midsize companies through increases in purchasing cost, but effects of cheap oil prices could offset the negative impact from the yen's fall," said Hajime Takata, chief economist at Mizuho Research Institute.

In contrast, Japanese multinationals as it pushes up the value of their overseas profit when converted into yen.

Lower oil prices may allow smaller companies to increase wages, a move that would contribute to a virtuous cycle in the economy where better-paid workers spend more and help companies boost revenue and profit, Mr. Takata added.

The 12-member Organization of the Petroleum Exporting Countries, which collectively pumps around one-third of the world's oil, agreed Thursday to stick to a current target of 30 million barrels a day, sending the West Texas Intermediate benchmark below $70 a barrel for the first time in more than four years.

As oil prices fell, individual investors in the Tokyo market picked up shares in airlines, while long-term institutional investors unloaded oil refiners and distributors that will be hurt by lower crude prices, said Mr. Sakai of T&D Asset Management.

Japan's main refinery operator, TonenGeneral Sekiyu K.K., fell 1.5% Friday to ¥993.

Some analysts say crude prices could in the near term.

"Oil prices could easily bounce back, given that the global economy is likely to be near its bottom, rather than slowing down further," said Takahiro Sekido, a strategist at the Bank of Tokyo-Mitsubishi UFJ.

But if oil prices drop and provide downward pressure on overall prices, it could fuel expectations for further monetary easing by the Bank of Japan, he added.

Write to Megumi Fujikawa at

Credit: By Megumi Fujikawa

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628509234

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628509234?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Makes Eurozone Inflation a Slippery Prospect; Falling Oil Prices Pose Yet Another Challenge For The European Central Bank

Author: Barley, Richard

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

[...]the outlook for eurozone growth given a 27% fall in Brent crude in euro terms so far this year has also brightened, especially when coupled with signs of improving business and consumer confidence, and easing constraints on credit.

Links: 360 Link to Full Text

Full text:

So much for the hoped-for bounce in Falling energy prices--even without taking account of --have put paid to that. Eurozone inflation in November was just 0.3% and looks almost certain to go lower in the near future.

That of course will raise expectations that the European Central Bank will go further in extending its asset-purchase program. This week Vice President Vitor Constancio said the ECB could consider government-bond purchases in the first quarter of next year.

But away from energy prices, inflation has been broadly stable over the last six months, at least in comparison with its sharper declines in 2012 and 2013. Core inflation--excluding energy, food, alcohol and tobacco--at 0.7% in November was just below its six-month average of 0.8%. The same is true of services prices, up 1.1% versus a six-month average of 1.2%, and industrial goods, flat versus up 0.1%.

The ECB still has to worry both about headline inflation and expectations. The risk from lower oil prices is that headline inflation could fall to zero or below in the near term. But the outlook for eurozone growth given a 27% fall in Brent crude in euro terms so far this year has also brightened, especially when coupled with signs of improving business and consumer confidence, and easing constraints on credit.

Expectations too seem to be being shaped by oil prices. The five-year/five-year euro inflation swap, a measure of longer-term expectations watched by the ECB, has declined in line with the fall in oil, RBS notes.

That raises the question of what would happen if oil prices were to recover--even by a relatively small amount. If inflation expectations are being mainly driven by oil--which could be true for consumers as well as markets, given that frequently-bought items such as fuel tend to have a bigger impact on perceived inflation--then a rebound could yet change the picture rapidly for the eurozone.

Higher oil prices may be a way off yet, however. That leaves the ECB grappling with the disinflationary impact of oil set against its stimulative effect on growth. Oil could send the ECB skidding toward the government-bond purchases it has so clearly sought to avoid.

Write to Richard Barley at

Corrections & Amplifications

An earlier version of this article failed to state that the 27% fall in Brent crude referred to prices denominated in euros.

Credit: By Richard Barley

Subject: Petroleum industry; Inflation; Eurozone

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628538258

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628538258?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil and Water; Monet and Manet learned from each other during a summer spent painting along the Seine.

Author: Lopez, Jonathan

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

Irritated that newspapers were mistaking him for the younger artist, French painter Edouard Manet (1832-83)--reigning star of the Parisian avant-garde during the 1860s and 1870s--initially had little use for his near-homonymic doppelgänger Claude Monet (1840-1926). But after meeting the man and finding him a talent of genuine originality, Manet warmed up. As the distinguished German art historian Willibald Sauerländer recounts in "Manet Paints Monet"--a compact volume of sparkling insight and charm--the two artists and their families spent the summer of 1874 together in the riverside town of Argenteuil, just north of Paris, and there embarked on a storied adventure of artistic discovery.

Manet and Monet were equally modern in style, but they went about the business of modernism by disparate methods. Both painters emphatically rejected the classical subject matter favored by the French Royal Academy of Painting and Sculpture--whose annual exhibition, the Salon, was the leading venue for contemporary painting and sculpture at that time. Manet brought a novelistic awareness of interpersonal disquietude to his scenes of contemporary life--as in, for instance, his scandalous "Olympia" (1863), which recasts the conventional mythological nude as an unashamedly naked courtesan. Monet, by contrast, was primarily a painter of natural phenomena, a keen formalist innovator who recorded his impressions of perceived reality in dazzling compositions of seemingly dematerialized color.

At Argenteuil, Monet painted scenes dominated by the play of light on water, working outdoors in a rowboat outfitted with a covered cabin at one end for shelter and a broad canopy for shade. Fascinated by the curious spectacle of this floating atelier, the lifelong city-dweller Manet proceeded to paint a portrait of Monet toiling at his craft in the blazing sun: The straw-hatted landscape painter sits, legs outstretched, before his easel at the boat's prow, while his wife, Camille, quizzically assesses his efforts from the relative comfort of the cabin.

"To be able to give an adequate representation of Monet in his atelier boat," Mr. Sauerländer tells us, "Manet paints like Monet." The more established artist not only adopts the younger man's methods by painting outside, or en plein air, but gamely tries out the short, sketchy brushstrokes and vibrant chromatic harmonies for which Monet and his Impressionist colleagues were becoming famous. Camille's facial expression is evoked with just a few calligraphic traces of paint, and the vivid contrast of the bright blue water and pale pink canopy sets off the white highlights of the sitters' linen garments to brilliant effect.

This was not just a fleeting experiment for Manet but a veritable Damascene conversion. During the course of the summer, he produced a string of minor masterpieces in which he grafted Monet's Impressionist technique to his own sociological preoccupation with la vie moderne. In "Argenteuil" (1874), for instance, Manet portrays a vacationing Parisian businessman and a young woman of lower social class chatting beside pleasure boats on the sunny docks in a scene subtly suggestive of dalliance. Here we witness, as Mr. Sauerländer puts it, "the transformation of the Impressionist representation of landscape and water into an Impressionist depiction of contemporary society." Manet continued to work out the consequences of this epiphany for the remainder of his career, returning to his customary urban subject matter with a newfound understanding of pure bright color in such iconic works as "A Bar at the Folies-Bergère" (1882).

Mr. Sauerländer's book covers terrain similar to T.J. Clark's "The Painting of Modern Life" (1984) but is blissfully free of Mr. Clark's convoluted writing style and overbearing Marxism. Mr. Clark remains a giant in this field, but Mr. Sauerländer is the more companionable author, and his work is highly recommended.

Mr. Lopez is editor at large of Art & Antiques.

Credit: By Jonathan Lopez

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Life and Style

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628538295

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628538295?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Statoil Backed to Run Johan Sverdrup Field; Norway's State Oil Company Recommended by Partners

Author: Hovland, Kjetil Malkenes

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

OSLO--Norway's Statoil ASA said on Friday that it had been recommended by its partners to operate the giant Johan Sverdrup oil field in the North Sea, one of Norway's biggest-ever finds, estimated to hold up to 2.9 billion barrels of crude.

Links: 360 Link to Full Text

Full text:

The Norwegian oil producer has previously said that at its peak. Norway's total crude output last year was 1.46 million barrels a day, more than halved from a peak in 2000.

The field development is estimated to cost up to 220 billion Norwegian kroner ($31.56 billion), but the full life-cycle price tag, including operating costs through 2068, is 450 billion kroner. Statoil expected life-cycle revenues of 1.35 trillion kroner. The field is set to start producing late 2019.

The plans on how to operate and develop the field will be submitted to the Norwegian authorities in February next year, Statoil said. The field will be developed with four platforms, and more installations could be added in the next phases of development, Statoil said.

The company's goal is to recover at least 70% of the field's oil resources. The production organization will be established in Stavanger on Norway's west coast, where Statoil's headquarters is situated.

A recent drop in oil prices to a four-year low around $72 per barrel is seen to jeopardize some oil projects in Norway, particularly in the Arctic, where infrastructure is scarce and development costs higher.

However, analysts expected the Johan Sverdrup field to be profitable with oil prices at about $40 per barrel, which is well below the nearby Gina Krog field, which requires $77 a barrel to be profitable according to the Norwegian government.

Partners in the Johan Sverdrup field include Lundin Petroleum AB, Det norske oljeselskap ASA, Petoro AS and Maersk Oil, the oil arm of Denmark's AP Moeller-Maersk A/S.

Write to Kjetil Malkenes Hovland at

Credit: By Kjetil Malkenes Hovland

Subject: Oil fields; Petroleum industry; Energy economics

Location: Norway North Sea

Company / organization: Name: A P Moller-Maersk Group; NAICS: 551112; Name: Maersk Oil; NAICS: 211111; Name: Statoil ASA; NAICS: 324110, 211111; Name: Lundin Petroleum AB; NAICS: 211111, 213112

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628538301

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628538301?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Gold Sinks to Near a Two-Week Low; Weaker Oil and a Stronger Dollar Sapping Investor Demand

Author: Shumsky, Tatyana

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

Tumbling energy costs are turning up the heat on investor demand for gold, said George Gero, a senior vice president with RBC Capital Markets Global Futures.

Links: 360 Link to Full Text

Full text:

Gold fell, as weaker oil prices and a firmer dollar pressured investors' appetites for protection from inflation.

Gold for December delivery, the front-month contract, fell $21.40, or 1.8%, to settle at $1,175.20 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the lowest settlement level since Nov. 13. For the week, the precious metal dropped 1.9%.

Gold declined as U.S. investors had their first chance to react to Thursday's drop in crude-oil prices. The Organization of the Petroleum Exporting Countries on Thursday said that it would leave output quotas unchanged. The decision comes as plentiful global supplies of the fuel have pushed crude prices down by more than 35% since June.

Tumbling energy costs are turning up the heat on investor demand for gold, said George Gero, a senior vice president with RBC Capital Markets Global Futures. Gold is a popular hedge against inflation, as some investors believe it will hold its value better than other assets if consumer prices rocket higher. However, with oil prices in retreat, a major contributor to production costs is shrinking, a shift that is likely to keep inflation tame for months to come.

"Manufacturing costs are sure to go down because of low crude prices; trucking, transportation and utility costs will go down, too," Mr. Gero said.

The dollar, which advanced against most other currencies, also kept gold prices under pressure. Gold is traded in dollars and becomes more expensive for buyers in other countries when the dollar strengthens against their home currencies.

Gold's slide found little respite from news that India removed one of the restrictions on gold imports put in place in 2013. The Reserve Bank of India ended the requirement that companies bringing gold into the country re-export 20% of the precious metal as jewelry. The restriction contributed to weakening India's demand for gold. Last year, India for the first time yielded the world's top-gold-consumer title to China.

Traders now shift their sights to Switzerland, where voters will decide Sunday on a referendum that calls for the Swiss National Bank to hold 20% of its reserves in gold, up from 8%. Recent polls suggest the measure is unlikely to pass.

"If the vote is no, as expected, then gold would likely fall back toward the early-November lows," said Leon Westgate, analyst with Standard Bank, in a note to clients.

Write to Tatyana Shumsky at

Credit: By Tatyana Shumsky

Subject: Gold markets; International finance

Location: India United States--US

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Swiss National Bank; NAICS: 521110; Name: Reserve Bank of India; NAICS: 521110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628542811

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628542811?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

OPEC's Twist of Faith for Oil Investors; Fallout From Oil's Rout Extends Beyond Producers

Author: Denning, Liam

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

Conventional wisdom in the exploration-and-production sector held that oil prices were supported by Chinese demand and supply being moderated by the Organization of the Petroleum Exporting Countries.

Links: 360 Link to Full Text

Full text:

In the wake of OPEC's decision not to cut output targets, the oil industry frets about too much supply. Its real problem: an excess of certainty.

Conventional wisdom in the exploration-and-production sector held that oil prices were supported by Chinese demand and supply being moderated by the Organization of the Petroleum Exporting Countries.

The added spice was the U.S. shale boom, which sucked in capital on the premise of surging output. Energy economist Phil Verleger draws a parallel with the Internet bubble. In this case, the disruptive technology wasn't the Web but fracking. Now, with the benchmark U.S. oil price falling below $70 a barrel, and investors' certainties tanking with it, the money plowed into the E&P revival is at risk.

Stocks are the most obvious victims, and the SPDR S&P Oil & Gas Exploration and Production exchange-traded fund duly slumped 13% on Friday. But the fallout will be further-reaching and more complex than that, creating losers but also some potential winners.

Losers first. While stocks have been hit hard, don't forget debt, in which obligations tend to remain obstinately fixed regardless of underlying commodity prices. From 2009 to 2013, the U.S. E&P sector outspent cash flow by $272 billion, according to IHS Herold. High-yield debt for the energy sector has risen threefold since 2008, to $210 billion, according to Brian Gibbons at CreditSights. Energy is the biggest sector of the high-yield market.

At $70 oil, E&P sector cash flow falls by a fifth, says Tudor, Pickering, Holt, and that includes the benefit of hedging. Woe to those lacking it: Continental Resources' recent decision to unwind its hedges looks especially badly timed. Its stock fell 20% Friday.

Beyond E&P firms, master limited partnerships operating pipelines and other infrastructure have been investor darlings. That isn't simply due to energy exposure, but also because their high payouts stand out in a low-yield world.

The biggest 15 pipeline MLPs have seen their aggregate market capitalization swell by $153 billion, or 80%, in the past two years alone, according to SNL Energy. In addition, the sector's high-yield debt has more than doubled since 2010, to $57 billion, according to CreditSights. Now, not only are energy prices uncertain, so, too, is the outlook for U.S. interest rates.

Now the winners. While they won't be unscathed, the big oil companies should see some benefit from the reset in oil prices and expectations. Their priority is gaining access to big reserves, and the E&P sector's pain should make acquisitions easier. Exxon Mobil's stock took a hit Friday. Yet, at 13.4 times forward earnings, its multiple has stayed pretty constant this year. The E&P sector, meanwhile, has seen its premium to Exxon collapse from 65% in late June to 26% now, and it will likely erode further.

The one certainty left today is that, when the excess washes out, someone will scoop up the perfectly good assets that are left behind.

Write to Liam Denning at

Credit: By Liam Denning

Subject: High yield investments; Petroleum industry; Cash flow; Prices; Energy industry

Location: United States--US

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628554758

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628554758?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

U.S. Oil Companies Hit by OPEC Decision; Share Prices of Energy Producers Tumble on Day After Cartel's Move to Maintain Output

Author: Ailworth, Erin; Gold, Russell

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

[...]stock prices of U.S. oil producers tumbled.

Links: 360 Link to Full Text

Full text:

The outlook for U.S. energy companies has dimmed, following a decision by the Organization of the Petroleum Exporting Countries to keep pumping lots of crude oil, despite a global glut.

Though was widely expected, it helped push U.S. oil prices down on Friday to under $70 a barrel, the lowest level in about four years.

Consequently, stock prices of U.S. oil producers tumbled. Shares of Continental Resources Co., the biggest producer in the Bakken Shale area in North Dakota, plunged nearly 20% on a shortened post-Thanksgiving trading day in New York. The company said earlier this month that it had liquidated nearly all of its oil-price hedges, betting that crude would rebound to $85 a barrel soon. The Oklahoma City-based company didn't respond to a request for comment.

Shares of other big U.S. producers affected included Chesapeake Energy Corp., down 12%, while Apache Corp. and Pioneer Natural Resources Co. were off around 11%. Devon Energy Corp. and EOG Resources Inc. dropped nearly 8% in price. The companies didn't respond to requests for comment or declined to comment.

Global energy companies that also own refineries were less affected, with shares of Exxon Mobil Corp. falling about 4%, to 90.63.

"Hard hats on for this normally mailed-in day in the stock market," energy analysts at Tudor, Pickering, Holt & Co. said in a client note on Friday.

U.S. energy companies have drilled tens of thousands of wells since 2008, creating million-barrel-a-day oil fields in North Dakota and South Texas. For the past six years, the companies have drilled aggressively, a luxury provided by triple-digit oil prices.

Lower oil prices mean that not all new wells will be worth the effort. Companies could postpone investment in a relatively underexplored and high-cost oil-producing tracts, such as the Tuscaloosa Marine Shale in Mississippi and Louisiana.

U.S. oil companies say they plan to ride out the low prices by shifting spending to their best acreage, where wells produce more oil and are economic even in the current price environment, such as the Eagle Ford Shale in Texas. Such a strategy could allow them to cut their spending, but keep oil production at current levels.

Moody's Investors Service said this week that it expects U.S. oil output to grow about 10% in 2015, despite what it predicts will be a 20% drop in capital spending.

Write to Erin Ailworth at and Russell Gold at

Credit: By Erin Ailworth And Russell Gold

Subject: Petroleum industry; Energy industry; Prices; Capital expenditures; Petroleum production

Location: Oklahoma United States--US New York North Dakota

Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: Pioneer Natural Resources Co; NAICS: 211111; Name: Tudor Pickering Holt & Co LLC; NAICS: 523110; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Devon Energy Corp; NAICS: 211111; Name: Apache Corp; NAICS: 324110, 211111, 213112; Name: Chesapeake Energy Corp; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628558288

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628558288?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Mexico's Peso Feels Heat from Falling Oil Prices; Peso Falls to Weakest Level Against U.S. Dollar in More Than Two Years on Decline in World Oil Prices

Author: Harrup, Anthony

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

MEXICO CITY--Mexico's peso fell Friday to its weakest level against the U.S. dollar in more than two years as the continuing decline in world oil prices pressured commodity-dependent currencies.

As the most traded of the emerging-market currencies, the peso is often used by investors to hedge emerging market exposure and sold off in times of global financial turmoil. Already under pressure along with other emerging market currencies on prospects of higher U.S. interest rates, the Mexican currency lost further ground after the Organization of the Petroleum Exporting Countries decided against cutting crude oil output to address falling prices.

The Mexican currency weakened as far as 13.96 to the dollar during Friday's session before settling back to 13.9080, its weakest close since mid-2012. The drop in oil prices, and the lack of liquidity because of the U.S. Thanksgiving holiday, were pressuring the exchange rate, local currency traders said.

The eighth most-traded currency in the world, according to the Bank for International Settlements, is down 5.9% from its 2013 close. Finance Minister Luis Videgaray said Friday that the peso's decline against the dollar so far this year has been smaller than that of the Brazilian real or the Peruvian sol. The peso's movements act as a natural shock-absorber against events such as a drop in the oil price, he added.

"When we had a fixed exchange rate, a couple of decades ago, these movements would cause an immediate outflow of capital, and particularly a loss of foreign reserves. That doesn't happen today," Mr. Videgaray said in a radio interview Friday. The minister said Mexico's export crude price on Thursday was between $65 and $66 per barrel.

But lower oil prices affect Mexico's fiscal accounts, since oil and related taxes account for around a third of federal government revenue. The government, which has budgeted for $79 a barrel in 2015, has hedged around 60% of next year's planned crude exports at $76.40 a barrel, and has money in a stabilization fund to cover further shortfalls with which it should be able to avoid budget cuts.

Oil dollars don't directly support the Mexican currency, as state oil company Petróleos Mexicanos changes its dollars at the central bank and not in the open exchange market. Over the longer term, however, oil helps the peso by bolstering the country's foreign reserves, which are currently at record levels of around $193 billion.

Local bank Banorte noted a recent increase in the correlation between the peso and oil prices from zero a month ago. The shift suggests oil prices could affect Mexico on two fronts: public finances and foreign direct investment resulting from the implementation of an ambitious overhaul in the energy sector to attract foreign capital, Banorte said in a report.

Foreign direct investment has slowed this year--just $15.3 billion in the first nine months--in part due to investors awaiting implementation of recent economic overhauls such as in energy, according to Bank of America Merrill Lynch. The recent flare-up in security issues, including protests following the disappearance and suspected murders of 43 teacher-college students after they were detained by police in late September in the southern state of Guerrero, is also likely weighing on investment and consumption, the bank said.

"We expect unrest could continue ahead of the [midterm] elections in 2015, though we do not expect escalation to a full-blown crisis. If this is the case, FDI should also increase ahead," the bank said.

Write to Anthony Harrup at

Credit: By Anthony Harrup

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628566323

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628566323?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil-Linked Currencies Extend Losses; OPEC Decision Triggers Sharp Decline in Oil Prices

Author: Ramage, James

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

The currencies of oil-producing countries such as Canada and Norway continued to weaken against the dollar for a second straight session Friday, as oil prices tumbled in the wake of OPEC's decision to leave its oil production ceiling unchanged.

The U.S. dollar rose 0.9% versus the Canadian dollar, to a three-week high of C$1.1435. The dollar rocketed 1.5% versus the Norwegian krone, to 7.0336 krone, the highest level since March 2009.

Fallout from the decision of the Organization of the Petroleum Exporting Countries to of 30 million barrels a day . Brent crude fell $2.43, or 3.4%, at $70.15 a barrel on ICE Futures Europe, its lowest settlement since May 2010. Friday's selloff added to losses Thursday, a regular trading day in Europe.

U.S. oil futures fell $7.54, or 10.2%, from Wednesday's close, at $66.15 a barrel on the New York Mercantile Exchange. It was the lowest settlement since September 2009.

Falling oil prices continued to pressure energy stocks, as well as the Canadian dollar, the Norwegian krone and the Russian ruble, which tumbled to its weakest level against the dollar during the European session before rebounding.

"The oil-related currencies catch everyone's eyes, given the OPEC decision [Thursday]," said Charles St-Arnaud, economist and currencies strategist at Nomura Securities. "A lot of negativity is being priced into those currencies."

In Canada, the OPEC decision also trumped positive numbers for third-quarter growth, which came in better-than-expected on Friday and signaled a broadening of the country's export base.

The price move, on a day marked by lighter holiday trade in the Americas session, remained consistent with investor behavior over the past several months. The greenback has gained against developed-market currencies since the summer, driven by a strengthening economy and the promise of higher interest rates in the U.S., which is attracting yield-hungry investors.

The Federal Reserve, which ended its large-scale asset purchase program last month, is considering when to raise interest rates, as central banks in Japan and the eurozone are easing policy to stimulate growth and ward off deflation. Higher U.S. rates make the dollar more attractive, as they boost returns on assets denominated in the currency.

The dollar on Friday rose 0.8% versus the yen, to ¥118.67, closing in on its strongest level against the Japanese currency since August 2007. The euro slid 0.2% to $1.2446, inching down toward its lowest level since August 2012.

The market will shift its attention next week to a policy meeting of the European Central Bank on Thursday, followed by the U.S. jobs report for November one day later.

Write to James Ramage at

Credit: By James Ramage

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628570959

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628570959?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Energy Quakes as OPEC Stands Pat; Oil Stocks Tumble, 2015 Budgets in Spotlight as Crude Prices Fall

Author: Scheck, Justin; Ailworth, Erin; Dawson, Chester

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

OPEC's decision to stand pat on oil production despite a global glut is hurting prospects for U.S. energy companies and slamming countries whose budgets rely on high oil prices.

Though the Organization of the Petroleum Exporting Countries' decision was widely expected, 10% to $66.15 a barrel on Friday, the lowest level since September 2009, and sent shares in energy producers tumbling.

Among the hardest hit were U.S. domestic oil producers including Continental Resources Co., the biggest producer in North Dakota's Bakken Shale. Its shares plunged on Friday nearly 20%, to $40.98.

Exxon Mobil Corp. fell 4.2%, BP PLC dropped 5.4% and Royal Dutch Shell PLC lost 7.3%, all in abbreviated New York trading on Friday.

Currencies of oil producing nations, including Russia, Nigeria and Canada, all weakened. Russia's finance ministry said government spending would be revised or cut.

Benchmark Brent crude for January deliveries traded down $2.43 a barrel at $70.15 a barrel on Friday. That added to losses on Thursday, when Brent plunged 6.7%.

Pascal Menges, a portfolio manager with Lombard Odier in Switzerland who has shares in U.S. shale oil producers, said OPEC's decision "created a very uncomfortable situation" for oil companies that must decide whether to curb investments. He predicts the global oil oversupply will decline over the winter and U.S. production growth will slow, preventing prices from falling much more.

If that is the case, he said, the least-indebted North American shale companies should stay profitable. Still, he said, he has cut his fund's investments in oil producers, moving some of the money to companies that buy and process oil.

Todd Staples, president of the Texas Oil & Gas Association, a trade group, said in a statement that low crude oil prices will impact some operations in the U.S., as well as globally. Still, he expects prices to eventually stabilize.

"We are confident the market will find an equilibrium," he said.

Canadian oil-sands producers also are under pressure. The break-even price for oil-sands surface mines is among the most expensive in the world, at around $85 a barrel, according to Bank of Nova Scotia. Operating costs at existing mines are less than half that amount. But the break-even point for so-called in situ projects, in which bitumen is heated and pumped up to the surface, range between $40 a barrel and $80 a barrel. Such projects represent the majority of future growth.

"We're going to be more challenged by a high price environment than many other jurisdictions," said Murray Edwards, chairman of Canadian Natural Resources Ltd., one of Canada's largest oil sands producers. "In the current price environment...you'll to see a real muting, or reduction, or deferment of future oil sands projects," Mr. Edwards said.

The immediate problem is rejiggering budgets originally built for the assumption of higher prices. For instance, BP Chief Executive Bob Dudley said last month that the company assumed oil prices of $80 a barrel when deciding whether to invest in its current projects.

A BP spokesman said the company continues to plan projects assuming a price of around $80 a barrel for "long-term investments which typically have lifespans of a decade or two."

Russia also planned its 2015 budget assuming an average oil price of $100 a barrel. On Friday, its finance ministry said the government would revise or cut spending, calling an average of $80 per barrel over the next few years "a moderately optimistic scenario."

The high oil price in recent years helped drive up costs for big players like BP and Shell. These giant companies now face the prospect of lower cash flow to fund those higher costs now locked into projects that will take years to complete. High costs from "the last two or three years are already baked into the contracts" for new projects, Shell Chief Financial Officer Simon Henry said last month.

A Shell spokesman said Friday the company's "price screening range" for new projects is between $70 a barrel and $110 a barrel. "A new project must be able to break even at $70 oil" to win approval for investment, he said.

Before Friday's decision, some smaller companies were considering giving up amid months of sagging prices. Often dependent on fickle capital markets to fund expensive exploration efforts, many have struggled to woo fresh investors amid today's lower prices. At a recent board meeting, directors of U.K.-based Fastnet Oil and Gas PLC, an investor in an unsuccessful well in Morocco earlier this year, discussed whether to stay in the oil industry.

"We have $25 million, what should we be doing?" Fastnet Chairman Cathal Friel said. He said the board has considered returning the money to shareholders, or diversifying far from the oil patch, including a foray the "medical technology" business.

Other industries may get a boost from lower prices. Mining giant Anglo American PLC benefits from about $42 million in extra annual earnings for each $10 drop in the oil price over the course of a year, a spokesman said. And many airlines-if they haven't locked in fixed prices for future fuel deliveries-could also come out ahead. Jet fuel typically accounts for 30% or more of a carrier's costs.

The International Air Transport Association, which represents more than 200 carriers, estimates the airline industry will spend $7 billion less on fuel this year than in 2013 now that jet fuel prices are around 20% below the year-ago level.

Still, many carriers have tried to protect against volatility by locking in fuel prices early. That now leaves some paying more than market rates. Ryanair Holdings PLC, Europe's largest discount airline, hedged about 90% of its anticipated full-year fuel consumption. The airline this month said it would take advantage of slump in oil to lock-in lower prices into 2017.

Henrik Meincke, chief economist at VCI, the association of Germany's chemical industry, said lower prices, if they're sustained, "will make raw materials less expensive for German chemicals companies." The price of naphtha, a key raw material, is about 30% lower in November than in June, he said. Some of that gain, though, will vanish amid likely price competition, he said.

The cause of this turmoil was OPEC's decision on Thursday not to cut output. Influential Saudi Arabian Oil Minister Ali al-Naimi argued against cutting production, a move some OPEC members had advocated to support prices, according to people briefed on his comments to fellow ministers at the oil cartel's meeting. He conceded falling prices will be painful, according to these people, but losing long-term customers to U.S. shale producers would be worse.

Mr. Naimi wasn't advocating forcing down prices to run U.S. shale producers out of business, these people said. Indeed, so-called break-even prices for shale production--the price at which wells remain economic--varies widely and can be relatively low. But Mr. Naimi warned that if OPEC cuts, non-OPEC crude likely will replace it. Attempts to reach the media office of the Saudi oil ministry weren't successful.

"Saudi Arabia is trying out a new gambit," wrote analysts at consultancy IHS Energy. "The Kingdom is testing the resilience of other producers to lower prices in trying to deal with rising North American oil production."

The lower prices have sent fund managers scurrying to reallocate assets. Paris-based asset management firm Carmignac Gestion has pulled out of some investments in energy companies and started selling futures contracts linked to indexes of oil and gas producers to protect itself from price declines, said Sandra Crowl, a member of the firm's investment committee.

Asset managers also were picking winners and losers among oil-producing governments. Aberdeen Asset Management has pulled investment out of oil-producing Nigeria and added to its positions in Turkey, a big oil importer, said portfolio manager Viktor Szabo.

"This is a massive positive for Turkey," said Timothy Ash, a currency strategist at Standard Bank. He says each $10 drop in the price of a barrel of oil saves Turkey about $4 billion annually on energy imports.

Benoît Faucon, Said Summer, Sarah Kent and Robert Wall contributed to this article.

Write to Justin Scheck at , Sarah Kent at and Summer Said at

Credit: By Justin Scheck, Erin Ailworth and Chester Dawson

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628570983

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628570983?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

The New Oil Order; OPEC feels the squeeze from the U.S. shale boom.

Author: Anonymous

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.

ProQuest document link

Abstract:

A lower oil price will mean pain for some U.S. producers, and it is showing up in lower share prices for energy companies.

Links: 360 Link to Full Text

Full text:

America's unconventional oil boom continues to yield major benefits--economic and geostrategic. The latest evidence is OPEC's decision on Thursday to defy expectations and maintain its current oil production target despite the steepest price decline since the 2008-2009 recession. The price of Brent crude, the global oil benchmark, plunged as a result to about $70 a barrel, continuing its decline from a peak of nearly $116 in June.

Not too many years ago the Organization of Petroleum Exporting Countries might have cut production to maintain higher prices. The cartel's countries have long sought to keep prices high at a level consistent with a growing global economy, not least to keep the revenue flowing into government coffers. Rogue states such as Venezuela and Iran desperately need the cash flow.

But the cartel has lost much of its pricing power thanks in part to the revival in U.S. oil production. Horizontal drilling and hydraulic fracturing--business innovations done mainly on private land--have pushed U.S. oil output to its highest level since the 1980s.

The Energy Information Administration says U.S. production reached more than nine million barrels a day this year and is expected to keep climbing. OPEC is afraid that demand for its crude will keep falling as U.S. supply continues to grow and more of it makes its way to the global market as American export barriers fall.

One way to read the OPEC decision is therefore as a price war to shake marginal U.S. producers from the market. The U.S. shale boom and high global oil prices have encouraged new areas of production with widely varying break-even price levels. Much of such proven areas as the Bakken Shale in North Dakota can remain profitable even at $50 a barrel, by most estimates. The Eagle Ford Shale in Texas also has a relatively low break-even. But newer areas with higher exploration and development costs could suffer if prices keep falling.

That's how markets are supposed to work, with supply and demand rather than a cartel of dictatorships setting prices. A lower oil price will mean pain for some U.S. producers, and it is showing up in lower share prices for energy companies.

But no boom lasts forever, and lower prices will discipline American drillers to focus their investments on the most promising areas and innovate further to reduce costs. A shake-out might have long-term benefits if it doesn't go too far.

Meanwhile, lower oil prices are an unmitigated boon to American consumers. The average gasoline price per gallon in the U.S. fell to $2.79 on Friday, down 50 cents from a year ago. That's a big difference to the average family filling up the SUV each week, especially wage earners who haven't had an increase in their standard of living during this entire economic expansion. Consumers who feel less pinched might open their checkbooks for non-energy purchases.

Lower prices will also add to the economic pressure on some of the world's worst dictators, notably Vladimir Putin. Russia doesn't belong to OPEC but it has benefited to the extent that the cartel's production controls have kept prices high. Already under pressure from EU and U.S. sanctions, Mr. Putin's ability to buy domestic political support will decline along with oil prices.

All of these benefits are flowing from a U.S. oil boom that government didn't predict and had almost nothing to do with. The political class has force-fed subsidies to renewable energy with little economic benefit. The new oil order is a reminder that markets and American ingenuity are better economic pillars than all the schemes of government planners.

Subject: Petroleum industry; Supply & demand; Recessions; Crude oil prices; Petroleum production

Location: United States--US

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 28, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628574379

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628574379?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Energy Quakes as OPEC Stands Pat; Oil Stocks and the Currencies of Major Oil-Producing Nations Tumble

Author: Scheck, Justin; Ailworth, Erin; Dawson, Chester

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

Energy company stocks and the currencies of major oil-producing nations stumbled Friday as OPEC's decision to maintain crude output levels despite a glut rippled across the globe.

The Organization of the Petroleum Exporting Countries' decision knocked down U.S. benchmark oil prices on Friday by 10% to $66.15 a barrel, the lowest level since September 2009.

Uneasy investors dumped energy stocks. Among the hardest hit were U.S. domestic oil producers including Continental Resources Co., the biggest producer in North Dakota's Bakken Shale. Its shares plunged on Friday nearly 20%, to $40.98.

Exxon Mobil Corp. fell 4.2%, BP PLC dropped 5.5% and Royal Dutch Shell PLC lost 7%, all in abbreviated New York trading.

Currencies of most major oil producing nations, including Russia, Nigeria and Canada, weakened. The Russian ruble tumbled almost 3% to an all-time low of 50.57 to the dollar, before recovering slightly. The Mexican peso slid to its weakest level versus the greenback in more than two years. Russia said it would revise or cut government spending.

Todd Staples, president of the Texas Oil & Gas Association, a trade group, said in a statement that low crude oil prices will impact some U.S. and global operations. Still, he expects prices to eventually stabilize. "We are confident the market will find an equilibrium," he said.

Canadian oil-sands producers also are facing pressure. The break-even price for new oil-sands surface mines is among the most expensive in the world, at around $85 a barrel, according to Bank of Nova Scotia. Operating costs at existing mines are less than half that amount. But the break-even point for so-called in situ projects, in which bitumen is heated and pumped up to the surface, range between $40 a barrel and $80 a barrel. Such projects represent the majority of future growth.

"We're going to be more challenged by a high price environment than many other jurisdictions," said Murray Edwards, chairman of Canadian Natural Resources Ltd., one of Canada's largest oil sands producers. "In the current price environment...you'll see a real muting, or reduction, or deferment of future oil sands projects," he said.

Brent crude for January deliveries traded down $2.43 a barrel at $70.15 a barrel on Friday. That added to losses on Thursday, when the oil industry's global benchmark fell 6.7%.

The immediate problem is rejiggering budgets built in a time of higher prices. For instance, BP Chief Executive Bob Dudley said last month that the company assumed Brent oil prices of $80 a barrel when deciding whether to invest in its current projects.

A BP spokesman said the company continues to plan projects assuming a price of around $80 a barrel for "long-term investments which typically have lifespans of a decade or two."

Russia also planned its 2015 budget assuming an average oil price of $100 a barrel. On Friday, its finance ministry said the government would revise or cut spending, calling an average of $80 a barrel over the next few years "a moderately optimistic scenario."

High oil prices in recent years came with rising costs for big companies including BP and Shell. These giants now face the prospect of lower cash flow to fund expenses now locked into projects that will take years to complete. High costs from "the last two or three years are already baked into the contracts" for new projects, said Shell finance chief Simon Henry in October.

A Shell spokesman said on Friday the company's "price screening range" for new projects is between $70 a barrel and $110 a barrel. "A new project must be able to break even at $70 oil" to win approval for investment, he said.

Before Thursday's decision, some smaller companies were already reeling. U.K.-based Fastnet Oil & Gas PLC, which had a well come up dry in Morocco earlier this year, recently discussed returning the company's remaining $25 million to shareholders or leaving the oil business to get into medical technology, said Chairman Cathal Friel.

Other industries may get a boost. Mining giant Anglo American PLC benefits from about $42 million in extra annual earnings for each $10 drop in the oil price over the course of a year, a spokesman said. And many airlines--if they haven't locked in fixed prices for future fuel deliveries--could also come out ahead.

Jet fuel typically accounts for 30% or more of an airline's costs. The International Air Transport Association, which represents more than 200 carriers, estimates the airline industry will spend $7 billion less on fuel this year than in 2013 now that jet fuel prices are around 20% below the year-ago level.

Henrik Meincke, chief economist at VCI, an association of German chemical manufacturers, said lower prices, if they're sustained, "will make raw materials less expensive for German chemicals companies." The price of naphtha, a refined oil that is a key raw material, is about 30% lower now than in June, he said. Some of that gain, though, will vanish amid likely price competition, he said.

The cause of this turmoil was OPEC's decision on Thursday not to cut output targets. Influential Saudi Arabian Oil Minister Ali al-Naimi argued against cutting production, a move some OPEC members had advocated to support prices, according to people briefed on his comments to fellow ministers at the oil cartel's meeting. He conceded falling prices will be painful, according to these people, but losing long-term customers to U.S. shale producers would be worse.

Mr. al-Naimi wasn't advocating forcing down prices to run U.S. shale producers out of business, these people said. Indeed, so-called break-even prices for shale production--the price at which wells remain economic--vary widely and can be relatively low. But Mr. al-Naimi warned that if OPEC cuts output, non-OPEC crude likely will replace it. Attempts to reach the media office of the Saudi oil ministry weren't successful.

Benoît Faucon, Summer Said, Sarah Kent and Robert Wall contributed to this article.

Write to Justin Scheck at , Sarah Kent at and Summer Said at

Credit: By Justin Scheck, Erin Ailworth and Chester Dawson

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 29, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628575707

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628575707?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Venezuela's Maduro Plans To Slash Spending as Oil Price Drops; President Aims to Cut Salaries, Create Committee to Find Savings in Bid to Shore Up Finances

Author: Vyas, Kejal

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

CARACAS--Venezuelan President Nicolás Maduro announced plans on Friday to cut public spending, beginning with his own salary, as the price of oil continues its slump.

The slide in crude prices of more than 30% since the summer has added a new layer of concern for Mr. Maduro, whose popularity, polls show, has dropped to a record low. The South American country is struggling with soaring inflation as well as a dollar crunch that has led to shortages of food and consumer goods.

Venezuela's basket of heavy crude and petroleum products tumbled 89 cents to end the week at $68.08 a barrel, the lowest in more than four years, the oil ministry reported.

"I don't take this blow from the drop in oil prices badly," Mr. Maduro said in a televised address to industry workers at the Miraflores presidential palace. "I take it as an opportunity to end superfluous, luxury, unnecessary spending."

The president said he would create a committee to formulate a proposal for a "substantial reduction" in spending, beginning by revising pay for heads of government ministries and state-run companies, a move he said would set an example. Mr. Maduro didn't offer specific figures for how much he was looking to reduce spending. But he received a standing ovation after asking workers for their support in the effort.

It isn't hard to find bloat in the government's budget, Mr. Maduro said. "The purchase of who knows how many cars and trucks...I ask: Is this really necessary?"

There will be no cuts in the social programs that have kept the ruling socialist party popular among Venezuela's poor, Mr. Maduro promised workers.

He also reiterated that his finance minister, Rodolfo Marco, will soon head to China to seek more financing from the country, which has pumped nearly $50 billion in loans into Venezuela since 2007.

Turning to allies like Russia and China for aid may be part of a series of "disorganized and unpredictable" actions that Venezuela is likely to take as it scrambles to raise funds, analysts at GlobalSource Partners said in a report Friday. The government may also look to further reduce imports to ration scarce dollars, the analysts said.

Friday's announcement follows a series of tax increases on luxury goods authorized by Mr. Maduro, a move widely characterized by analysts as unlikely to do much to help shore up state finances.

Prices of Venezuela's bonds, which are the highest-yielding in the developing world because of the perceived risk, continued to drop Friday on concerns that the country's economic woes and oil's decline could lead to a default. Venezuelan officials, however, insist that they have the resources to honor their obligations.

On Thursday, Venezuela failed to convince fellow members of the Organization of the Petroleum Exporting Countries to take measures to prop up oil prices at the group's summit in Vienna. But Mr. Maduro said his government will continue pushing for $100 a barrel, which they say is fair price for the commodity that makes up 96% of their hard-currency income.

--Write to Kejal Vyas at kejal.vyas@wsj.com

Credit: By Kejal Vyas

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 29, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628583157

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628583157?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Companies, Nations Reel On Price Drop --- U.S. Benchmark Tumbles 10% in Wake Of OPEC Move; Stocks, Currencies Fall

Author: Scheck, Justin; Ailworth, Erin; Dawson, Chester

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Nov 2014: A.1.

ProQuest document link

Abstract:

Exxon Mobil Corp. fell 4.2%, BP PLC dropped 5.5% and Royal Dutch Shell PLC lost 7%, all in abbreviated New York trading. Todd Staples, president of the Texas Oil & Gas Association, a trade group, said in a statement that low crude oil prices will impact some U.S. and global operations.

Links: 360 Link to Full Text

Full text:

Energy company stocks and the currencies of major oil-producing nations stumbled Friday as OPEC's decision to maintain crude output despite a glut rippled across the globe.

The Organization of the Petroleum Exporting Countries' decision knocked down U.S. benchmark oil prices on Friday by 10% to $66.15 a barrel, the lowest level since September 2009.

Exxon Mobil Corp. fell 4.2%, BP PLC dropped 5.5% and Royal Dutch Shell PLC lost 7%, all in abbreviated New York trading.

Currencies of most major oil producing nations including Russia, Nigeria and Canada weakened. The Russian ruble tumbled almost 3% to an all-time low of 50.57 to the dollar, before recovering slightly. The Mexican peso slid to its weakest level versus the greenback in more than two years. Russia said it would revise or cut government spending.

If that is the case, he said, the least-indebted North American shale companies should stay profitable. Still, he has cut his fund's investments in oil producers, moving some of the cash to firms that buy and process oil.

"We're going to be more challenged by a high price environment than many other jurisdictions," said Murray Edwards, chairman of Canadian Natural Resources Ltd., one of Canada's largest oil sands producers. "In the current price environment . . . you'll see a real muting, or reduction, or deferment of future oil sands projects," he said.

Brent crude for January deliveries traded down $2.43 a barrel at $70.15 a barrel on Friday. That added to losses on Thursday, when the oil industry's global benchmark fell 6.7%.

A BP spokesman said the company continues to plan projects assuming a price of around $80 a barrel for "long-term investments which typically have lifespans of a decade or two."

Russia also planned its 2015 budget assuming an average oil price of $100 a barrel. On Friday, its finance ministry said the government would revise or cut spending, calling an average of $80 a barrel over the next few years "a moderately optimistic scenario."

High oil prices in recent years came with rising costs for companies including BP and Shell. These giants now face the prospect of lower cash flow to fund expenses now locked into projects that will take years to complete. High costs from "the last two or three years are already baked into the contracts" for new projects, Shell finance chief Simon Henry said in October.

A Shell spokesman said on Friday the company's "price screening range" for new projects is between $70 a barrel and $110 a barrel.

Jet fuel typically accounts for 30% or more of an airline's costs. The International Air Transport Association estimates the industry will spend $7 billion less on fuel this year than in 2013. Still, carriers that sought to protect against volatility by locking in fuel prices early may end up paying more than market rates. Ryanair Holdings PLC hedged about 90% of its anticipated full-year fuel use.

The cause of this turmoil was OPEC's decision on Thursday to hold output targets. Influential Saudi Arabian Oil Minister Ali al-Naimi argued against cutting production, a move some OPEC members had advocated to support prices, according to people briefed on his comments.

Mr. al-Naimi wasn't advocating forcing down prices to run U.S. shale producers out of business, these people said. But he warned if OPEC cuts output, non-OPEC crude likely will replace it. Attempts to reach the Saudi oil ministry weren't successful.

Asset managers were picking winners and losers among oil-producing nations. Aberdeen Asset Management has pulled investment out of Nigeria and added to its positions in Turkey.

---

Benoit Faucon, Summer Said, Sarah Kent and Robert Wall contributed to this article.

Credit: By Justin Scheck, Erin Ailworth and Chester Dawson

Subject: Crude oil prices; Petroleum industry; Petroleum production

Location: United States--US Nigeria Russia Canada

Company / organization: Name: Canadian Natural Resources Ltd; NAICS: 211111, 213112; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Bank of Nova Scotia; NAICS: 522110; Name: Texas Oil & Gas Association; NAICS: 813910

Classification: 5310: Production planning & control; 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.1

Publication year: 2014

Publication date: Nov 29, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628599122

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628599122?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Corporate News: Oil Boss's Pay Is Challenged in U.K.

Author: Williams, Selina

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Nov 2014: B.4.

ProQuest document link

Abstract:

In 2013, Peter Vosser, the CEO of Anglo-Dutch oil major Royal Dutch Shell PLC, received pay valued at $11.5 million including shares and bonuses, while Rex Tillerson, the head of Texas-based Exxon Mobil Corp., received $28.1 million, according to company reports.

Links: 360 Link to Full Text

Full text:

Corrections & Amplifications

The surname of Peter Voser, former CEO of Royal Dutch Shell PLC, was incorrectly spelled as Vosser in a Corporate News article Saturday about the executive-pay controversy at U.K. energy company BG Group PLC. Also, though the article was describing Mr. Voser's 2013 pay, it didn't make clear that he is no longer with Royal Dutch Shell.

(WSJ Dec. 2, 2014)

LONDON -- One of the biggest executive-pay revolts in the U.K. in recent years gathered speed as a major shareholder-advisory group recommended that BG Group PLC investors reject a share award for the oil and gas company's incoming chief executive.

European energy CEOs have long made less than their counterparts in the U.S., but the pay package of Helge Lund, who takes BG's helm in March, is stoking investor concern that compensation in the European industry is getting out of hand. New U.K. legislation giving shareholders more information and influence over pay packages has led to greater scrutiny of executive pay levels in all sectors.

At issue is Mr. Lund's performance-linked award of as much as GBP 12 million ($18.8 million) in stock over five years, which is subject to a shareholder vote at a special meeting Dec. 15 because it falls outside a remunerations policy approved by BG holders in May.

That award comes on top of Mr. Lund's salary and other bonuses and share awards that could total as much as $22 million a year, up from the $2.1 million he received at much-bigger rival Statoil ASA of Norway.

British investor-advisory group Pensions & Investment Research Consultants, or PIRC, said told clients on Thursday that the additional share award hasn't been adequately justified and that Mr. Lund already stands to receive compensation well beyond levels granted to European peers in the sector.

"Such an excessive award could be seen as a golden hello award as it grossly exceeds the maximum limits set in the existing policy," said PIRC, recommending that its clients, who hold assets under management worth around $2.36 trillion, oppose the award.

Mr. Lund's proposed remuneration is competitive in the international oil and gas industry, a BG spokesman said.

While many shareholders approve of the appointment of Mr. Lund, a 52-year-old Norwegian who is credited with transforming Statoil during his decadelong tenure, many object that the additional share award breaches the pay policy they approved in May.

They also feel under pressure as BG has been without a CEO since April and the company has warned that Mr. Lund is "not obliged" to take the job if the award isn't approved.

PIRC isn't the only adviser criticizing Mr. Lund's package.

In a rare move this past week, the Institute of Directors, the U.K.'s main business lobby group, criticized the pay deal, calling it "excessive, inflammatory and contrary to the principles of good corporate governance."

"We've had word from several investors who are concerned -- we haven't heard from any who are happy," said IOD Director General Simon Walker.

Even U.K. Business Secretary Vince Cable urged shareholders to reject the package, saying they should use the power they had been given to vote down excessive pay deals.

Credit: By Selina Williams

Subject: Petroleum industry; Chief executive officers; Shareholder voting; Investments; Executive compensation

Location: United States--US

People: Tillerson, Rex W Voser, Peter Lund, Helge

Company / organization: Name: Statoil ASA; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BG Group PLC; NAICS: 221210

Classification: 2120: Chief executive officers; 6400: Employee benefits & compensation; 8510: Petroleum industry; 9175: Western Europe

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.4

Publication year: 2014

Publication date: Nov 29, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628599131

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628599131?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Gold Slips and Falls On Oil's Crude Patch

Author: Shumsky, Tatyana

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Nov 2014: B.5.

ProQuest document link

Abstract:

Tumbling energy costs are turning up the heat on investor demand for gold, said George Gero, a senior vice president with RBC Capital Markets Global Futures.

Links: 360 Link to Full Text

Full text:

Gold fell, as weaker oil prices and a firmer dollar pressured investors' appetites for protection from inflation.

"Manufacturing costs are sure to go down because of low crude prices; trucking, transportation and utility costs will go down, too," Mr. Gero said.

"If the vote is no, as expected, then gold would likely fall back toward the early-November lows," said Leon Westgate, analyst with Standard Bank, in a note to clients.

Credit: By Tatyana Shumsky

Subject: International finance; Crude oil prices; Gold; Commodity prices

Location: India United States--US

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Swiss National Bank; NAICS: 521110; Name: Reserve Bank of India; NAICS: 521110

Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.5

Publication year: 2014

Publication date: Nov 29, 2014

column: Commodities Report

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628599137

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628599137?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Gulf Markets Weaken on Falling Oil Prices; Investors Express Concern About Regional Economic Growth

Author: Lohade, Nikhil

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2014: n/a.

ProQuest document link

Abstract:

From a 12-month perspective, "...we are more circumspect about the future of oil prices and expect equity markets in the GCC to gyrate more or less in lock step with sentiment in the market for crude oil," Arjuna Mahendran, the chief investment officer at Dubai-based Emirates NBD, told clients in a note.

Links: 360 Link to Full Text

Full text:

Stock markets in the Gulf closed sharply lower Sunday as sparked concerns about the economic growth prospects for the crude-exporting region.

Saudi Arabia and its Gulf neighbors are among the biggest sellers of oil globally, using billions of dollars in revenue from hydrocarbon sales to bolster local economies.

But the Organization of the Petroleum Exporting Countries--of which Saudi Arabia is the de facto leader--decided late last week to , which means a glut in the market is likely to remain and keep oil prices at multiyear lows.

"Investors, especially international, are reassessing their [Gulf] regional exposure amid sharply weaker oil," said Mohammed Ali Yasin, managing director at Abu Dhabi-based NBAD Securities. "The concern obviously is that lower oil [prices] will curb the governments' ability to spend locally and grow the economies."

Saudi Arabia's Tadawul, the Middle East's biggest market, led the regionwide selloff--the kingdom's benchmark index fell 4.8% to 8624.89.

Dubai shares fell 4.7% to 4281.43, Abu Dhabi's market slipped 2.6% to 4675 and Doha's benchmark index shed 4.3% to 12,760.46.

"Led by Saudi, which is completely correlated to the collapse in the oil price, all regional markets took another leg down," said an analyst at Al Masah Capital. "Saudi's sharp decent into a bear market cannot be ignored by the rest of the markets; in many instances it is Saudi money moving out of U.A.E. and Qatar markets that is further precipitating the regional decline," the analyst said.

Stock markets in Qatar and the United Arab Emirates are among the top performers globally this year on the back of strengthening local economies, with investor interest boosted by their elevation to emerging status by index compiler MSCI Inc. in May.

Saudi Arabia itself has benefited from strong buying after the authorities there announced plans to open the local market to direct foreign investment early next year. But a slump in oil prices triggered a strong bout of profit-taking in the past few months.

Saudi petrochemical companies were among the top losers. Sabic, one of the world's largest petrochemical producers, fell nearly 10% to SAR88.25 ($23.51). Amanat Holdings, which made its debut on the Dubai bourse, was also caught in the selloff, closing 12% below its issue price at AED0.88 (24 U.S. cents).

Write to Nikhil Lohade at

Credit: By Nikhil Lohade

Subject: Stock exchanges; Prices; Investments

Location: Dubai United Arab Emirates Qatar Saudi Arabia

Company / organization: Name: MSCI Barra; NAICS: 523999, 541690

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 30, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628786735

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628786735?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Even After Selloff, Energy Stocks Find Few Buyers; Investors Hesitate to Chase Bargains Following Oil-Price Slide

Author: Strumpf, Dan; Wirz, Matt; Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2014: n/a.

ProQuest document link

Abstract:

"If their earnings fall even more due to depressed oil prices and low demand for energy services, these stocks could still be expensive, even at these lower prices," said Margie Patel, a portfolio manager who oversees $1.4 billion in stock and bond investments at Wells Fargo Asset Management. Aaron Dunn, energy analyst on the $8.6 billion value-investing team at fund manager Eaton Vance Corp., said in the past two months one fund he works on has bought shares of large integrated oil companies including Exxon Mobil Corp., whose shares have held up better in the downturn.

Links: 360 Link to Full Text

Full text:

Energy stocks are on sale following a five-month plunge in U.S.-traded crude oil, but so far few investors are heeding the temptation to bargain-hunt.

Portfolio managers and analysts covering the sector are bracing for a wave of dividend cuts, share-repurchase delays and capital-spending reductions that will likely ripple across an industry reeling from the 38% tumble in U.S. crude futures since June. Distressed-debt investors are circling a handful of deeply indebted U.S. shale-oil producers that are deemed unlikely to survive further oil-price declines without mergers or overhauls.

Driving the tumult, traders and analysts say, is a steepening decline in the price of crude oil. Entering 2014, few analysts predicted that crude futures would move much from a range of $80 to $110 that has prevailed since the financial crisis.

But now, following an unexpected decision by the Organization of the Petroleum Exporting Countries to maintain its existing output target, prices could soon plumb new depths, analysts say, testing the finances of many energy companies large and small. Nymex crude now sits at $66.15 a barrel, a five-year low.

"There's lower prices ahead," said Ed Morse, global head of commodities research at Citigroup Inc.

On Friday, energy companies in the S&P 500 tumbled 6.3% in the wake of the OPEC decision. Over the past three months, they have fallen 18.3%. The broader S&P 500 is up 3.2% in the same period.

Some investors say that if the crude-price slump intensifies, many energy firms will suffer from an accelerating retreat from the sector. More firms likely will pull back on investment spending, dimming their growth prospects, while others will trim dividend payouts and share-buyback plans, reducing the appeal of their shares.

Oil-field-service companies and drillers have been among the hardest hit, owing to the likelihood that producers spend less on new projects. The biggest service company by market capitalization, Schlumberger Ltd., is down 22% in the past three months, while Halliburton Co., which is in the process of buying rival service provider Baker Hughes Inc., has slid 38%.

Last Wednesday, Norwegian offshore driller Seadrill Ltd. suspended its dividend to focus on paying down its debt. Shares of the company have plunged 29% since the announcement. Other drilling companies have tumbled as well, amid fears that they could follow suit in cutting dividends. Shares of Transocean Ltd. are down 17% since the news.

"Everyone's paying the price for this drop in oil prices," said Jason Kotik, senior investment manager at Aberdeen Asset Management, which manages about $520 billion. "Expectations have been ratcheted down."

Mr. Kotik owns shares of large service companies but said he is "struggling to find quality companies" of smaller size.

While the tumble has made some shares less expensive, many investors say it is too soon to step in. The price/earnings ratio of S&P 500 energy companies over the next 12 months stood at 13.5 on Friday, down from 14.7 on June 30, according to FactSet. For the broader S&P 500, the figure is 16.2, up from 15.6 at midyear.

Ms. Patel remains parked in shares of oil-and-gas pipeline and storage companies, whose fortunes are less bound to the price of oil than producers and service firms are. "I think it's too early to look for bargains in the energy sector," she said.

Many investors say the selloff in oil prices has reduced their appetite for the many highly indebted, more speculative companies in the sector. Aaron Dunn, energy analyst on the $8.6 billion value-investing team at fund manager Eaton Vance Corp., said in the past two months one fund he works on has bought shares of large integrated oil companies including Exxon Mobil Corp., whose shares have held up better in the downturn. He has been avoiding smaller companies with high levels of debt.

"There's a fair amount of companies that can't survive under their leverage with lower oil prices," Mr. Dunn said.

To be sure, crude prices could yet recover if the global economy rebounds, a new geopolitical risk emerges or OPEC lowers its production ceiling. At the same time, investors say a sustained drop in crude prices could drive a wave of consolidation among producers with shakier finances, leaving the sector in stronger shape in the long run.

The downturn has implications for energy companies' bonds as well as their shares. A growing number of companies behind the bond bonanza are now struggling to service the debt they took on now that oil sells for less than $70 a barrel. Credit-ratings firm Moody's Investors Service on Nov. 25 changed its outlook on oil and gas producers to negative from positive, citing the likelihood of sustained weakness in oil prices.

Scott Roberts, senior portfolio manager at Invesco Ltd., who helps manage $3 billion in high-yield bond investments, said he cut his holdings of energy bonds by half around midyear on expectations of lower prices, to about 5% of his portfolio.

He still has a modest position, but he has recently been selectively buying bonds of producers with relatively low leverage and stronger assets, including those of California Resources Corp. and Denbury Resources Inc. He said he expects U.S. crude prices to rise starting in the first quarter of 2015 and finish the year at $80 a barrel.

"There's been an opportunity here over the last couple of months to add to quality names that got oversold in this selloff," he said.

The energy industry has issued $1.22 trillion of new bonds since 2009 and accounted for about 7% of all corporate bonds over that period, according to Dealogic. That is about twice the $622 billion the industry borrowed from 1995 through 2008.

Offshore oil driller Energy XXI Ltd. has been a hedge-fund darling in recent years with Mount Kellett Capital Management LP and Kyle Bass's Hayman Capital LP holding as much as 11% of its shares, according to Capital IQ.

The company more than doubled its debt load to $3.8 billion this year to acquire EPL Oil & Gas and a bond it sold in May to finance the deal has fallen 25% to 75 cents on the dollar since September. Its stock fell 37% on Friday to $4.01.

In a statement, the company said it has hedges in place to help weather a downturn in oil prices and said it is "cash-flow neutral" with oil around "the mid $60s" through next year.

In 2011, private-equity firm KKR & Co. acquired Samson Resources Corp. for $7.2 billion with more than $4 billion of debt, making the deal the second largest leveraged buyout of the year. But Samson's cash flows are "significantly impacted by the price we receive for our oil," the company said in its third-quarter earnings report.

Samson's bond prices have fallen by 42% since early September, according to FactSet. The company couldn't be reached for comment.

Oil's dramatic move downward takes the commodity far below where one of the world's most well-known oil speculators, former Citigroup Inc. trader Andrew Hall, pegged as a potentially profitable entry point.

Mr. Hall told investors this fall in his Astenbeck Capital Management LLC hedge fund that oil at $85 a barrel "could be a bargain," particularly for delivery contracts several years into the future, as relatively low prices should stimulate demand by boosting global GDP growth, according to investor communications viewed by The Wall Street Journal.

Astenbeck's November performance wasn't immediately available, but the fund lost money in October amid falling oil prices, paring its gains for the year.

Rob Copeland contributed to this article.

Credit: By Dan Strumpf, Matt Wirz and Nicole Friedman

Subject: Petroleum industry; Energy industry; Investments; Asset management; Crude oil prices

Location: United States--US

Company / organization: Name: Seadrill Ltd; NAICS: 213111; Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112; Name: Aberdeen Asset Management; NAICS: 523920; Name: Transocean Ltd; NAICS: 213111, 213112; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990; Name: Citigroup Inc; NAICS: 551111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 30, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628803820

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628803820?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Chevron Takes Ecuador's Government to Court; By fighting a dodgy lawsuit, the giant oil company may help the country's democracy.

Author: O'Grady, Mary Anastasia

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

New York federal judge Lewis Kaplan ruled last week that Chevron may "conduct discovery" regarding a $6.4 million contract between the government of Ecuador and MCSquared, a Brooklyn, N.Y., public-relations firm. Score another victory for the oil company over plaintiffs seeking to blame it for environmental damage in the Ecuadorean jungle.

MCSquared "likely possesses evidence relating to the coordination between the Republic of Ecuador and the plaintiffs behind the fraudulent lawsuit," Chevron said in a statement on Nov. 24.

The company is attempting to scrutinize Ecuador's role in what increasingly looks like a corporate shakedown. But Chevron isn't the only potential beneficiary of what might come to light. Ecuadoreans who live powerlessly under a repressive, secretive regime that bills itself as democratic will also be better informed.

No opposition member of the national assembly has access to public contracts under Ecuadorean President Rafael Correa. Requests for such information are batted away by the government-controlled legislature and ignored by the attorney general and comptroller general. When opposition congressman Andrés Páez asked the government to provide the details of what MCSquared did to earn the $6.4 million, the government launched a smear campaign against him and accused him of being a CIA agent.

In 2011 an Ecuadorean court ruled that Chevron had to pay $18.2 billion for environmental degradation that plaintiffs allege Texaco left behind in the jungle. Last year an Ecuadorean appellate court cut the award to $9.5 billion. But Chevron maintains that Texaco, which it bought in 2001, met its cleanup obligations and was released by Ecuador from further liability in 1998. It's not about to knuckle under to the lower amount either.

In 2013 Chevron sued plaintiffs' lawyer Steven Donziger in federal court in New York under the Racketeer Influenced and Corrupt Organizations (RICO) Act--and won. Judge Kaplan found that Mr. Donziger had engaged in coercion, bribery and the fabrication of evidence, among other misdeeds, in the Ecuador court. Mr. Donziger is appealing the verdict.

Regardless of the outcome of the appeal, the plaintiffs are trying to have the Ecuadorean ruling enforced in places where Chevron has assets, including Brazil, Argentina and Canada.

Chevron is fighting back. Discovery is one useful tool. As an example, it yielded incriminating outtakes from a film that Mr. Donziger was making about the lawsuit in Ecuador. The information helped Chevron make its case in the RICO trial. Now the oil company wants the details in the MCSquared relationship that might be relevant to its claim that Mr. Correa's government is working to discredit Chevron and to "promote enforcement" of what Chevron says was a fraudulent judgment. "That evidence is relevant to Chevron's ongoing cases in other foreign jurisdictions," the company said in its statement on Nov. 24.

In 2011 Mr. Correa began a process to close Ecuador's Supreme Court and to create a new Supreme Court that he controls. He also introduced a law that allows an executive-controlled judicial council to remove any judge for "inexcusable mistakes." Since then, the practice of jailing adversaries or assigning them hefty fines has chilled public criticism. Yet outside the country it's more difficult to control the narrative. That's where MCSquared comes in.

The company filed with the Justice Department as an agent of a foreign government in July, more than a year after its $6.4 million contract with Ecuador was signed. Chevron wasn't mentioned. But in the contract attached to the filing, Ecuador describes the need to "execute a strategy of immediate containment to reduce any damage or mitigate the effects of" actions by multinational organizations and corporations to diminish Ecuador's reputation "on the international level." Mr. Correa seems to have had Chevron in mind. In an amended foreign-agent filing dated Sept. 10, MCSquared included multiple press releases denouncing Chevron as a polluter of the Amazon.

Bloomberg journalist Paul Barrett reported in May that protesters at an anti-Chevron demonstration held at the company's annual shareholder meeting in Midland, Texas, were paid $85 per person. Hollywood celebrities have also been generously compensated for their "outrage," as MCSquared's September amended filing indicates.

Yet a cool $4.5 million is still unaccounted for. That's the difference between the $1.9 million in disbursements detailed in MCSquared's September filing and the total amount paid to MCSquared according to the July filing. The government has not denied paying the full amount of the contract but will not answer Andrés Páez's inquiry about where the rest of the money went.

I called MCSquared's Jean-Paul Borja, a communications adviser at the company, on Wednesday. He told me to call back on Friday. On Friday he did not answer his phone and did not return messages I left on his voice mail. Perhaps Ecuadoreans will learn more when Chevron goes to discovery with MCSquared.

Write to O'Grady@wsj.com

Credit: By Mary Anastasia O'Grady

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 30, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628811142

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628811142?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

The Global Shakeout From Plunging Oil; New supply--rather than demand--is dominating the market, and OPEC has been caught by surprise.

Author: Yergin, Daniel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2014: n/a.

ProQuest document link

Abstract:

The turmoil in prices, with spasmodic plunges over the past few days, will likely continue. Since 2008--when fear of "peak oil," after which global output would supposedly decline, was the dominant motif--U.S. oil production has risen 80%, to nine million barrels daily. [...]Venezuela would be the No. 1 loser if the Keystone XL pipeline is built, as production from Canadian oil sands would displace Venezuelan heavy oil from its largest single market, the U.S. Gulf Coast refineries.

Links: 360 Link to Full Text

Full text:

The decision by members of the Organization of the Petroleum Exporting Countrieson Thursday not to cut production reflects a profound shift in the world oil market. The demand for oil--by China and other emerging economies--is no longer the dominant factor. Instead, the surge in U.S. oil production, bolstered by additional new supply from Canada, is decisive. This surge is on a scale that most oil exporters had not anticipated. The turmoil in prices, with spasmodic plunges over the past few days, will likely continue.

Since 2008--when fear of "peak oil," after which global output would supposedly decline, was the dominant motif--U.S. oil production has risen 80%, to nine million barrels daily. The U.S. increase alone is greater than the output of every OPEC country except Saudi Arabia.

The world has experienced sudden supply gushers before. In the early 1930s, a flood of oil from East Texas drove prices down to 10 cents a barrel--and desperate gas station owners offered chickens as premiums to bring in customers. In the late 1950s, the rapidly swelling flow of Mideast oil led to price cuts that triggered the formation of OPEC.

And in the first half of the 1980s, a surge in oil from the North Sea, Alaska's North Slope and Mexico caused prices to plunge to $10 a barrel. That posed a much greater crisis for OPEC than today: Over those same years, global demand fell by more than two million barrels a day owing to a deep recession, greater conservation and the switch to coal from oil for electricity generation. This time world oil demand is still growing, but weakly.

For the past three years, oil prices hovered around $100 a barrel as disruptions in Libya, South Sudan and elsewhere, and sanctions on Iranian exports, eerily balanced out the production increases from the U.S. and Canada. But the slower global economic growth that became apparent a few months ago was accompanied by weaker demand for oil, just when Libya suddenly quadrupled output to almost a million barrels a day. The result: Prices weakened in September and then tumbled.

OPEC's decision last week reflects the conviction of its "have" nations--the Persian Gulf countries, with very large financial reserves--that cutting output would mean losing market share, particularly to Iran and to what they see as Iran-dominated Iraq. Instead, they have adopted a strategy of leaving it to the market for now; OPEC is waiting, in the words of Saudi Oil Minister Ali al-Naimi, for the oil market "to stabilize itself eventually."

It is now clear that the new U.S. production is more resilient than anticipated. There has been a widespread view that at around $85 or $90 a barrel extracting "tight" oil from shale would no longer be economical. However, a new IHS based on individual well data finds that 80% of new tight-oil production in 2015 would be economic between $50 and $69 a barrel. And companies will continue to improve technology and drive down costs.

True, with prices now near or below $70 a barrel, U.S. companies are looking hard at their investment plans--where and how much to cut or postpone. But it will take time for these decisions to affect supply. U.S. oil output will continue to rise in 2015.

The OPEC members in big trouble are the "have-nots"--those with small financial reserves and high government budgets. No country clamored more loudly for OPEC production cuts than Venezuela. Once an oil powerhouse, Venezuela depends on oil revenues for up to 65% of government spending. But its production has fallen by a third since 2000. Owing to gross mismanagement, Venezuela's economy is already in chaos, its political system in crisis and unrest is mounting. And Venezuela would be the No. 1 loser if the Keystone XL pipeline is built, as production from Canadian oil sands would displace Venezuelan heavy oil from its largest single market, the U.S. Gulf Coast refineries.

Iran also clamored loudly for a production cut. High prices earlier this year give Tehran some budget cushion, but the government has little leeway for the next fiscal year. Iran depends on oil for half of its budget, and the country is already suffering from sanctions, which have cut its oil exports almost in half. Lower prices will prolong Iran's recession.

A few days ago President Vladimir Putin said that Russia, the world's largest oil producer and not a member of OPEC, is preparing for lower, even "catastrophic" oil prices. Oil provides over 40% of the Russian budget, but Mr. Putin has built up foreign exchange reserves worth a few hundred billion dollars, in part to cope with an oil-price collapse. Still, in an economy that is heavily dependent on imports of food and consumer goods, the falling value of the ruble means rising prices for imports, in effect slashing the incomes of consumers. Combined with the effect of sanctions from the Ukraine crisis, this means Russia is headed for recession.

The biggest impact of lower oil prices on future output may well be not in North America, where many people are looking for it, but in the rest of the world. Even before the collapse in prices, major oil and natural-gas companies had become preoccupied with the continually rising costs of developing new supply and were heeding the call from investors for "capital discipline."

This price decline will turn this preoccupation into an obsession. The result will be a slowdown and reduction in major new investments around the world. The losers will be the nations trying to woo investment for new oil and natural-gas projects. Countries in Africa, Asia and Latin America are already finding that fewer companies are showing up to bid for new opportunities, and such bids that are proffered will be lower, perhaps much lower, than governments were expecting. The days are past when these countries can insist on very tough terms in taxes, royalties and other requirements that drive up costs and cause delay.

The drama is far from over. If prices remain close to their current level, OPEC members will likely come together again to reassess the market, especially as the stronger winter demand fades with the approach of spring. But a pickup in world economic growth, or new disruptions or geopolitical crises in the Middle East or North Africa or elsewhere, could send prices up again.

Mr. Yergin, vice chairman of IHS, is author of "The Quest: Energy, Security, and the Remaking of the Modern World" (Penguin Press, 2012).

Credit: By Daniel Yergin

Subject: Petroleum industry; Supply & demand; Cartels; Recessions; Petroleum production; Electricity generation; Production increases; Price cuts

Location: China Iran Canada

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Nov 30, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628811144

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628811144?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Lessons From Oil's Black Friday

Author: Zweig, Jason

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]you earn a positive "roll return" if you can sell this month's futures contract for more than it costs to buy next month's. [...]you earn interest on the collateral that secures your bet.

Links: 360 Link to Full Text

Full text:

Long before it referred to consumers storming through shopping malls, "Black Friday" stood for a dire day in the financial markets. On Friday, Sept. 24, 1869, an attempt by mogul Jay Gould and his cronies to corner the gold market failed and --sending many speculators to their ruin.

At the end of last week, the commodities market had a Black Friday that harked back to that devastation of 145 years earlier.

The prices of U.S. crude oil fell 10.2%, silver 6.4%, natural gas 6.1% and copper 5.8%. The Alerian MLP Index--a basket of companies, organized as master limited partnerships, that handle and distribute oil and gas--fell 5.3%. Gold got off easy, losing a mere 1.8%.

There are lessons in this latest Black Friday for all investors, not just those who lost money on commodities. Here are some of the most salient.

Beware of extreme extrapolations. In 2008, as the price of oil brushed past $145 a barrel, analysts rushed to get out ahead of the "trend" with their predictions of where the price was headed. Goldman Sachs called for oil prices to hit $200; of the industry foresaw the price reaching $300.

Right on cue, oil went down, not up--divebombing 77% between July and December 2008 and bottoming barely above $30 a barrel. Analysts then hastened to reverse their projections, just in time for oil prices to go right back up.

Now that oil has fallen 38% in five months, you should expect a rash of predictions of apocalyptically low prices. If you own energy stocks or MLPs, it is probably too late to sell them (unless you can use a tax loss to offset realized gains elsewhere in your portfolio). Instead, watch for the last optimists to be swept away by pessimism--at which point it will be an opportune time to add to your energy stocks or MLPs. We're probably not there yet.

With any asset, be skeptical of anyone who forecasts either an epic boom after prices have risen or an even more catastrophic collapse after they have fallen hard.

When the consensus is strong, it's wrong. Between Nov. 4 and 11, more than 900 institutional investors and traders participated in the latest Barclays Global Macro Survey, a poll among clients of the global bank. They predicted, on average, that energy would generate more than a 30% return by the end of March 2015. Barely 5% predicted that the price for Brent crude oil--then about $82 a barrel--would be below $70 at the end of the first quarter of 2015. One in six said it would be $90 to $100.

There is still time for them to be proved right, of course, but Brent sank 3.5% to $70.02 on Black Friday.

By the same token, the consensus on 2015 stock returns--that --is probably wrong, too. The outcome that is most widely expected is the one that is least likely to be realized.

Understand how you will make money before you risk losing it. A stock generates returns through dividends, earnings growth and any potential rise in price. A bond provides returns through interest payments and any capital gain. Real estate produces rental income and a possible gain on sale.

The return on commodities comes from different sources. First, the market, or "spot," price can go higher than what you paid for it. Second, you earn a positive "roll return" if you can sell this month's futures contract for more than it costs to buy next month's. Finally, you earn interest on the collateral that secures your bet.

Historically, the long-term performance of commodities, but it has been largely negative in recent years as . And collateral return, which was significantly positive in the past, has been squeezed to almost nothing in today's low-interest-rate world.

So two of the three sources of return have been impaired. When spot prices plunge, as they just did, there's little else to support returns.

More than $69 billion in new money poured into commodity mutual funds and exchange-traded funds between 2009 and 2011, the year gold glittered above $1,800 an ounce. Asking your financial adviser to explain exactly might have stopped him from steamrolling you into a strategy that you--and perhaps he--didn't understand.

The future returns on stocks and bonds have been crimped, too, of course.

With the S&P 500's dividend yield just under 2%, the long-term growth rate of dividends and earnings at about 4.5% (including inflation), and a haircut of 0.5% to 1% to account for today's high stock prices, a sensible expectation for long-term annual stock returns is 5.5% to 6% (including inflation), says William Bernstein, an investment manager at Efficient Frontier Advisors in Eastford, Conn.

And with the Barclays U.S. Aggregate Bond Index yielding just over 2%, bond investors can't earn much more than that without taking excessive risk.

The ultimate lesson: When assets are priced for perfection in an imperfect world, investors who don't slash their expectations are apt to be disappointed at best and devastated at worst.

intelligentinvestor@wsj.com; twitter.com/jasonzweigwsj

Credit: By Jason Zweig

Subject: Master limited partnerships; Crude oil prices; Institutional investments; Petroleum industry; Crude oil; Statistical data

Location: United States--US

Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: News

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628829116

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628829116?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Even After Selloff, Energy Stocks Find Few Buyers; Investors Hesitate to Chase Bargains Following Oil-Price Slide

Author: Strumpf, Dan; Wirz, Matt; Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Energy stocks are on sale following a five-month plunge in crude oil, but so far few investors are heeding the temptation to bargain-hunt.

But now, following an unexpected decision by the Organization of the Petroleum Exporting Countries to maintain its existing output target, prices could soon plumb new depths, analysts say, testing the finances of many energy companies large and small. Early Monday in Asia, Nymex crude stood at $64.74 a barrel, a five-year low.

"There's lower prices ahead," said Ed Morse, global head of commodities research at Citigroup Inc.

On Friday, energy companies in the S&P 500 tumbled 6.3% in the wake of the OPEC decision. Over the past three months, they have fallen 18.3%. The broader S&P 500 is up 3.2% in the same period.

Oil-field-service companies and drillers have been among the hardest hit, owing to the likelihood that producers will spend less on new projects. The biggest service company by market capitalization, Schlumberger Ltd., is down 22% in the past three months, while Halliburton Co., which is in the process of buying rival service provider Baker Hughes Inc., has slid 38%.

Mr. Kotik owns shares of large service companies but said he is "struggling to find quality companies" of smaller size.

Many investors say the drop in oil prices has reduced their appetite for the many highly indebted, more speculative companies in the sector. Aaron Dunn, energy analyst on the $8.6 billion value-investing team at fund manager Eaton Vance Corp., said in the past two months one fund he works on has bought shares of large integrated oil companies including Exxon Mobil Corp., whose shares have held up better in the downturn. He has been avoiding smaller companies with high levels of debt.

"There's a fair amount of companies that can't survive under their leverage with lower oil prices," Mr. Dunn said.

The downturn has implications for energy companies' bonds as well as their shares. A growing number of companies behind the bond bonanza are struggling to service the debt they took on now that oil sells for less than $70 a barrel. Credit-ratings firm Moody's Investors Service on Nov. 25 changed its outlook on oil-and-gas producers to negative from positive, citing the likelihood of sustained weakness in oil prices.

"There's been an opportunity here over the last couple of months to add to quality names that got oversold in this selloff," he said.

The company more than doubled its debt load to $3.8 billion this year to acquire EPL Oil & Gas, and a bond it sold in May to finance the deal has fallen 25% to 75 cents on the dollar since September. Its stock fell 37% on Friday to $4.01.

In a statement, the company said it has hedges in place to help weather a downturn in oil prices and said it is "cash-flow neutral" with oil around "the mid $60s" through next year.

In 2011, private-equity firm KKR & Co. acquired Samson Resources Corp. for $7.2 billion with more than $4 billion of debt, making the deal the second-largest leveraged buyout of the year. But Samson's cash flows are "significantly impacted by the price we receive for our oil," the company said in its third-quarter earnings report.

Samson's bond prices have fallen by 42% since early September, according to FactSet. The company couldn't be reached for comment.

Astenbeck's November performance wasn't immediately available, but the fund lost money in October amid falling oil prices, paring its gains for the year.

Rob Copeland contributed to this article.

Write to Dan Strumpf at , Matt Wirz at and Nicole Friedman at

Credit: By Dan Strumpf, Matt Wirz and Nicole Friedman

Subject: Petroleum industry; Energy industry; Investments; Asset management; Crude oil prices

Location: United States--US

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628829158

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628829158?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Despite Glut, U.S. Firms Aren't Likely to Slash Oil Output; New Pressure From OPEC Will Cause Pain for American Energy Firms

Author: Ailworth, Erin

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract:

The growth in U.S. energy output could begin to slow toward the end of next year, said Jeff Tillery, an analyst at Tudor, Pickering, Holt & Co., noting that if U.S. oil prices stay at about $70 a barrel, drilling activity in terms of rig count and capital expenditures could decline roughly 25% next year.

Links: 360 Link to Full Text

Full text:

New pressure from OPEC will cause a lot of pain for U.S. energy companies, but they probably won't slash American oil output anytime soon, experts said this weekend.

The decision by the Organization of the Petroleum Exporting Companies to maintain crude output despite a global glut sent the benchmark price for American oil tumbling Friday to $66.15, its lowest level since September 2009. Companies loaded with too much debt or operating in fringe locations face big trouble if U.S. crude prices remain at $65 to $70 a barrel for long.

But many shale drillers are likely to cut spending while still pumping from cheap-to-produce areas like the Eagle Ford and Permian in Texas. And some companies have oil-price hedges that will buoy profits even if crude is trading at four-year lows.

Take Goodrich Petroleum Corp., a small Houston company that drills most of its wells in the Tuscaloosa Marine Shale in Mississippi and Louisiana, a less developed and still high-cost area. The company's shares plunged 34% on Friday, to $6.05, and they are down almost 80% since oil prices started declining in June.

The company will probably cut spending, but it also expects to increase the amount of oil it pumps, its president, Robert Turnham, said in an email. A significant portion of the company's anticipated 2015 oil production is hedged at $96 a barrel, he said, adding that the company plans to "live within our means until oil prices recover to a more reasonable level."

Other companies have already begun pulling back on 2015 spending plans, including Continental Resources Inc., a major producer in North Dakota's Bakken Shale that has said it won't add any new rigs next year. More are expected to follow in the coming weeks as they set next year's capital-expenditure budgets.

But that doesn't translate into a steep drop in output, noted Leo Mariani, an analyst at RBC Capital Markets LLC. "No one's going to shut in existing producing wells," he said, "just less spending next year." His forecast is for a roughly 15% decline in capital spending on U.S. onshore drilling in 2015.

Some analysts believe U.S. companies will attempt to outlast OPEC, whose resolve to let the market move oil prices may be weakened by the suffering of member countries like Venezuela, Iran and Ecuador, whose economies depend on higher oil prices.

"They believe, as I believe, that OPEC is not going to be able to hold out," said Dominick A. Chirichella, an analyst for the New York-based Energy Management Institute. Meanwhile, he said, lower oil prices will translate into cheaper gasoline costs--"a wonderful Christmas present for the consumer."

Some U.S. companies will begin absorbing weaker operators. Nasdaq energy analyst Tamar Essner said she expects consolidation first among services companies, then perhaps among pipeline operators.

Producers, she added, might try to consolidate acreage in important areas such as the Eagle Ford and Permian shale regions of Texas and the Bakken of North Dakota."In terms of major transactions on the producers' side, I see that as being muted for a while," she said, as companies wait to see if oil prices stabilize.

Write to Erin Ailworth at

Credit: By Erin Ailworth

Subject: Crude oil prices; Petroleum industry; Capital expenditures; Petroleum production

Location: United States--US Texas

Company / organization: Name: RBC Capital Markets; NAICS: 523110; Name: Goodrich Petroleum Corp; NAICS: 211111; Name: Tudor Pickering Holt & Co LLC; NAICS: 523110; Name: Continental Resources Inc; NAICS: 211111

Publication title: Wall Street Journa l (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628829354

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628829354?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

BG Group Reduces Helge Lund's CEO Pay Package; British Oil and Gas Group Bows to Shareholder Pressure, Scraps $19 Million Share Award

Author: Williams, Selina

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

LONDON--BG Group PLC has bowed to investor pressure and scrapped a share award valued at £12 million ($19 million) for the British energy group's incoming chief executive, following one of the biggest revolts over executive pay in the U.K. in recent years.

The U.K. oil and natural-gas producer said on Monday that Helge Lund, who starts as CEO in March, won't be receiving the previously offered performance-linked award of £12 million over five years.

Shareholders had objected to the award's size and the fact that it fell outside the company's remuneration policy, which they had approved in May.

Instead, the 52-year-old Mr. Lund, who had been chief executive of Statoil ASA, is to get an initial award of shares under BG's existing long-term incentive plan. On paper, the award is valued at £10.6 million, but because it is subject to it is expected to realize a value of roughly £4.7 million, the company said.

Following BG's climb-down, a Dec. 15 shareholder vote on Mr. Lund's share award has been canceled. Mr. Lund, meanwhile, has waived his right not to join the company. Previously, he was under no obligation to take the CEO job if shareholders rejected the £12 million conditional share award.

Mr. Lund's revised initial share award comes on top of a salary and other bonuses and awards of as much as £14 million annually, if he and BG hit various targets.

BG has been without a CEO since the previous boss, Chris Finlayson, resigned in April after only 16 months in the job, leaving Chairman Andrew Gould in charge and looking for a successor.

The company, which was once a top pick for investors in the sector, has fallen out of favor following a series of , production downgrades and cost overruns on big projects.

Its by nearly one-third this year, making the company--whose assets include highly prized oil fields in Brazil and gas discoveries in Tanzania--more attractive as a takeover target.

While most investors have agreed that Mr. Lund has the relevant experience to become BG's new boss, they were concerned that BG's generous offer could lead to across the oil and gas sector.

Sacha Sedan, director of corporate governance at Legal & General Investment Management, a top-10 investor in BG, said he was encouraged to see the company responding to investor concerns.

"As long-term engaged investors, we look forward to the new CEO joining and creating shareholder value for all," he said.

The Institute of Directors, a leading U.K. business lobby group that last week criticized Mr. Lund's pay package, applauded BG's move.

"While substantial, the total remuneration is reduced and now falls within proper limits for a company of BG's size and international importance," said Simon Walker, the group's director general.

British investor-advisory group Pensions & Investment Research Consultants, or PIRC, told clients last week that the additional share award for Mr. Lund hadn't been adequately justified. Mr. Lund already stood to receive compensation well beyond levels granted to European peers in the sector, PIRC said.

Write to Selina Williams at

Credit: By Selina Williams

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628845141

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628845141?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Slump Weighs on Markets; Russian Ruble Falls to Record Low

Author: Stubbington, Tommy; Cox, Josie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract:

Brent crude oil dropped more than 3.5% to $67.53 a barrel before recovering to trade around $71.80, as last week's decision by the Organization of the Petroleum Exporting Countries to leave its continued to rattle markets.

Links: 360 Link to Full Text

Full text:

The recent slump in oil prices continued to weigh on global markets Monday, dragging down stocks and hammering the Russian ruble in particular.

Compared with the 13% drop in Brent crude last week, and the particularly abrupt slide on Friday, oil prices were relatively steady Monday but the repercussions of the last week's move remained intense.

The Russian ruble, closely linked to oil because energy accounts for a big portion of the country's exports, of 53.90 to the dollar, more than 5% weaker on the day. Later, the currency picked up from its weakest levels, amid signs of moderate dollar sales by the central bank, according to traders.

The slide in oil is "reinforcing the loss of investor confidence in the ruble," which has also been beset by concerns over Western sanctions against Russia and the conflict in Ukraine, said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ.

Piotr Chwiejczak, an emerging-market strategist at BNP Paribas said that he was surprised that Russia's central bank had not defended the 50 ruble per dollar mark more fiercely.

"I still think that capital controls are pointless but I do think that interest rates need to be a lot higher," he said.

The Nigerian naira also fell to a fresh record low against the dollar, but other energy-linked currencies proved more resilient, with the Canadian dollar and Norwegian krone rising, having fallen sharply on Friday.

Elsewhere, Stock markets felt the effects of the recent falls in energy prices.

In Europe, the Stoxx Europe 600 ended the session 0.5% lower.

Energy stocks once again led declines, with oil and gas producers on the index down 0.9%.

Additionally, markets were also weighed down by showing a slower-than-expected pace of expansion in November. Similar data from .

In the U.S., the S&P 500 was trading 0.9% lower and the Dow Jones Industrial Average was down 0.4% in late European trade, with traders citing for the Thanksgiving weekend.

Retail spending over the Black Friday weekend fell 11%, according to the main industry trade group, a sign that early deals are losing their allure. Separately, data on the U.S. manufacturing sector showed a modest slowdown as well.

Gold prices were also volatile Monday. They initially dropped after a proposal to increase the central bank's gold holdings. The initiative would have forced the country's central bank to hold one-fifth of its assets in gold.

Gold fell by 1.7% to $1,155.20 a troy ounce in early European trade before recovering to $1,197.50 an ounce.

Helping offset the pressure on the precious metal after the Swiss vote, India lifted its trade restrictions on gold imports with immediate effect. Given the move by one of the top gold importers, analysts at Barclays said they "expect the floor for gold prices to firm".

Elsewhere, a by Moody's Investors Service only briefly dented the performance of the yen, which quickly rebounded from a seven-year low against the dollar to rise 0.2%. Although a rating cut often hurts a country's currency, the yen tends to rise in times of market stress because it is seen by investors as a safe haven.

Brendan Brown, head of economic research at Mitsubishi UFJ Securities International, also said that the Moody's move was largely priced in and that the muted market reaction was therefore not surprising.

There are many reasons to be worried about Japan but this credit rating cut is certainly not one of them," he said.

The Nikkei stock index had closed for the day before the announcement, up 0.8% at a seven-year high.

Back in Europe, investors are looking ahead to Thursday's European Central Bank meeting, with expectations building that officials will signal a strong intention to expand their asset purchase program to try and boost anemic rates of inflation and jump-start a flagging economy.

Weakness in commodities has acted as a drag on prices, piling further pressure on central bankers in the eurozone and elsewhere to take action.

"The immediate focus will remain on cheaper oil; good news for consumers and for those companies benefiting from reduced input cost pressures, less so for central bankers wrestling with disinflationary concerns," said Ian Williams, an economist and strategist at brokerage Peel Hunt.

Government bonds in the eurozone hit fresh record highs amid expectations of further ECB easing. Germany's 10-year yield dipped just below 0.7% in early trade, a new low. Yields fall as prices rise.

Write to Tommy Stubbington at and Josie Cox at

Credit: By Tommy Stubbington and Josie Cox

Subject: American dollar; Central banks; Stock exchanges; Investments; International trade; Trade restrictions; Currency; Dow Jones averages

Location: Russia

Company / organization: Name: BNP Paribas; NAICS: 522110; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628853603

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628853603?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Corporate News: U.S. Firms Aren't Likely to Slash Oil Output --- Amid New Price Pressures, Many Shale Drillers Are Expected to Cut Spending but Continue Pumping at Low-Cost Sites

Author: Ailworth, Erin

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Dec 2014: B.3.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

New pressure from OPEC will cause a lot of pain for U.S. energy companies, but they probably won't slash American oil output anytime soon, experts said this weekend.

"They believe, as I believe, that OPEC is not going to be able to hold out," said Dominick A. Chirichella, an analyst for the New York-based Energy Management Institute. Meanwhile, he said, lower oil prices will translate into cheaper gasoline costs -- "a wonderful Christmas present for the consumer."

Some U.S. companies will begin absorbing weaker operators. Nasdaq energy analyst Tamar Essner said she expects consolidation first among services companies, then perhaps among pipeline operators.

Producers, she added, might try to consolidate acreage in important areas such as the Eagle Ford and Permian shale regions of Texas and the Bakken of North Dakota.

Credit: By Erin Ailworth

Subject: Output; Petroleum production; Energy industry

Location: United States--US

Company: Organization of Petroleum Exporting Countries--OPEC

Classification: 9180: International; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.3

Publication year: 2014

Publication date: Dec 1, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628856481

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628856481?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Oil Rebounds, But Few See a Bottom; OPEC's Move to Stand Pat Signals Market Will Stay Oversupplied

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract:

Halliburton Co. is in the process of buying rival oil-service company Baker Hughes Inc. Weatherford International PLC on Monday said it agreed to sell its engineered-chemistry and drilling-fluids businesses to an affiliate of Berkshire Hathaway Inc.'s Lubrizol unit. Some investors are looking for signs that slumping oil prices could spark higher demand, and U.S. employment data on Friday will be a key indicator, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Higher employment can spur more gasoline demand, as more commuters drive to work.

Links: 360 Link to Full Text

Full text:

U.S. oil prices posted their biggest one-day gain in two years on Monday as traders locked in profits on bearish bets following last week's selloff.

But many market watchers were skeptical that Monday's gains signaled that oil prices had reached their bottom, pointing to global supplies that continue to overwhelm demand.

Oil prices tumbled to multiyear lows after the Organization of the Petroleum Exporting Countries decided on Thursday to maintain its production quotas, rather than agreeing to support prices by lowering its output target.

The group's decision sent shock waves through financial markets that continued to be felt on Monday. Shares of some U.S. oil producers added to last week's declines, highlighting concerns about these companies' ability to operate expensive shale-oil fields amid plunging prices. Bonds of low-rated energy companies also sank, reflecting fears that some producers will default if prices fail to recover.

Many investors and analysts believe with OPEC on the sidelines it will take cutbacks by companies in the U.S. and Canada to bring supply and demand in line and pull the market out of its swoon. That day may not come until deep into 2015 or beyond, some analysts say.

"The era of $100 [a barrel] oil is over," Citigroup said in a note. "Oil prices appear to be falling rapidly to--if they haven't already reached--production costs."

On Monday, light, sweet oil for January delivery shot up 4.3% to $69.00 a barrel from Friday's close, recovering from a more-than five-year low below $64 a barrel hit in overnight trading. It was the biggest one-day percentage gain for the U.S. benchmark since August 2012. Brent futures, the international benchmark, gained 3.4% to end at $72.54 a barrel.

Investors said much of Monday's activity was driven by traders closing out profitable bets on falling prices or opening positions that would protect them should the market rebound. Both the U.S. benchmark and Brent slumped Thursday and Friday to fresh multiyear lows, posting two-day losses of about 10%.

"Today's a little bit more of a rebound from Friday's plastering," rather than a long-lasting change in direction, said Kyle Cooper, analyst at IAF Advisors in Houston. "We got [to five-year lows] really quick, and it's not an entirely bad thing to take some profits."

Roland Austrup, who manages $54 million as chief executive of Integrated Managed Futures Corp., said his funds posted 6% gains in November largely due to a bet that oil prices would fall. After last week's selloff, he kept his wagers on lower oil prices but used options to reduce losses in case prices rose.

"Anytime you get a big significant move like this, it's prudent to hedge," Mr. Austrup said. "It certainly doesn't reflect a view that it's over...There's no impetus for prices to go up."

Volatility in the oil market has caught out some funds. Brevan Howard Asset Management LLP plans to close its $630 million commodity hedge fund after the fund suffered heavy losses in energy markets in September, people familiar with the fund said Saturday.

The slump in oil prices is pressuring energy companies, and analysts and bankers expect a string of deal-making as highly levered companies become attractive for acquisition.

Some investors are looking for signs that slumping oil prices could spark higher demand, and U.S. employment data on Friday will be a key indicator, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Higher employment can spur more gasoline demand, as more commuters drive to work. The national average price of retail gasoline was $2.77 a gallon Monday, down 50 cents from a year ago.

Upcoming macroeconomic reports "will be looked at as a demand indicator and the energy market will adjust itself accordingly," Mr. Yawger said.

But without action from OPEC, the market will remain oversupplied, said Barclays in a note. Barclays lowered its oil-price forecasts for this year and next after the OPEC meeting, as did BNP Paribas SA and Citigroup Inc. Barclays now expects Brent prices to average $72 a barrel next year, while BNP forecasts $77 a barrel and Citi has called for $80 a barrel.

"It will have to endure a volatile adjustment period while non-OPEC supply, demand and even some OPEC producers adjust," analysts at Barclays said.

January reformulated gasoline blendstock, or RBOB, rose 5.34 cents, or 2.9%, to $1.8810 a gallon.

January diesel gained 5.12 cents, or 2.4%, to $2.2124 a gallon.

Matt Wirz, Laurence Fletcher, Chiara Albanese and Michael Calia contributed to this article.

Write to Nicole Friedman at

Credit: By Nicole Friedman

Subject: Petroleum industry; Profits; Futures; Crude oil prices

Location: United States--US

Company / organization: Name: Lubrizol Corp; NAICS: 325199; Name: New York Mercantile Exchange; NAICS: 523210; Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628872034

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628872034?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Ruble Hits New Low as Oil Prices Drop; Central Bank Intervention Helps Slow Volatile Trading

Author: Ostroukh, Andrey; Albanese, Chiara

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract:

Kseniya Yudaeva, first deputy chairwoman of the central bank, told a group of regional officials that a further drop in oil prices is highly probable, according to the Interfax news agency. [...]a fall in the ruble can actually ease pressure on the deficit.

Links: 360 Link to Full Text

Full text:

MOSCOW--The ruble plunged to a record low against the dollar, its sharpest fall this year, following a recent dive in the price of oil, Russia's main source of foreign-currency revenue.

The ruble declined as much as 6% in intraday trading on Monday, its worst daily drop since 1998, when the currency was devalued and Russia defaulted on its debt. The dollar climbed to almost 54 rubles in intraday trading, before falling back. Late Monday in New York, the dollar bought 51.116 rubles, compared with 50.274 rubles late Friday.

Traders said the ruble's recovery seemed to be the result of intervention by the central bank, which doesn't disclose its activities in real time. The dollar has gained 55% against the ruble this year.

Russia's benchmark RTS stock index dropped 1.6%, and the cost of insuring against a default on the country's debt jumped sharply Monday.

"The ruble is a no-touch as long as oil prices go down. It is all about the oil, and the central bank's slow reaction, as they don't want to burn reserves too fast," said Viktor Szabo, a portfolio manager at Aberdeen Asset Management.

One way for the central bank to support the ruble is by buying it, using its holdings of dollars and other currencies.

"It's difficult to call the bottom with liquidity so thin, and the oil price continuing to slide," said Daniel Wood, a portfolio manager at Fischer Francis Trees & Watts in London. "Although the oil price is a contributing factor to the currency move, I think that negative sentiment toward Russia is helping to exacerbate the move to current levels."

Oil prices plunged late last week, as the Organization of the Petroleum Exporting Countries said it would maintain its crude output despite a glut. On Monday, crude prices rebounded slightly.

After spending $30 billion to slow the ruble's slide in October, the central bank said last month that it would allow the currency to float freely, intervening only if market moves posed a major threat to financial stability. Traders said Monday's action appeared to be the central bank's first sales of hard currencies since announcing the free float. The sales, which they said appeared to be moderate in size, quickly reversed the market, but weren't big enough to pull the Russian currency back into positive territory for the day.

"The central bank isn't willing to fight external trends," said Egor Fedorov, an analyst at ING Bank in Moscow. "That is disappointing for a lot of people."

Some major banks reported rising demand among customers for foreign exchange. "To say there is no panic among the population about the situation on the currency market wouldn't be quite accurate," said Alexei Yegorov, chief analyst at lender Promsvyazbank. Still, he added, "the majority of the economically active population has already converted some of its savings to foreign currency." Other Russians have no savings to speak of, he noted.

With the sharp drop in the price of oil, Russia's largest export, central-bank officials have been preparing the population for more declines in the ruble. Kseniya Yudaeva, first deputy chairwoman of the central bank, told a group of regional officials that a further drop in oil prices is highly probable, according to the Interfax news agency. She said the central bank was planning for prices to fall as low as $60 a barrel and remain there for a prolonged period, a scenario that only recently had been considered extreme.

Ms. Yudaeva said the central bank would intervene to support the ruble only "to prevent panic among the population."

Economists said the central bank's seemingly low-key response to the ruble's plunge suggests the government has decided to let the currency handle the adjustment to the drop in oil prices.

"We suspect that a weaker currency has actually become an important part of the government's strategy for dealing with lower oil prices, and in particular limiting the damage to the public finances," analysts at Capital Economics said in a note.

A large share of Russia's government revenue is effectively pegged to the dollar, because it comes from dollar-denominated taxes on oil. The vast majority of spending is in rubles, however, and doesn't immediately adjust when the currency drops.

As a result, a fall in the ruble can actually ease pressure on the deficit.

With an exchange rate of 50 rubles per dollar and an oil price of $70 per barrel, the 2015 budget deficit would be at around 2.2% of gross domestic product. But with an exchange rate of 35 rubles per dollar, seen in early June, next year's deficit would be 5% of GDP, according to Capital Economics.

Still, the sharp fluctuations in the rate have fueled inflation. Monday, Ms. Yudaeva of the central bank said the annual rate of price increases could rise to near 10% in the first quarter, the highest rate in years.

"Such rapid fluctuations in the ruble are harmful for the economy. Companies are absolutely not happy about such swings. A 5% one-day change in the ruble rate is killing any financial planning," said Mr. Fedorov at ING.

A poll released on Monday by the Public Opinion Foundation showed that 67% of Russians said in November that they think that the weaker ruble will have an impact on their daily lives. Only 53% of respondents thought so in October.

VTB24, the retail arm of VTB, one of Russia's biggest lenders, said demand for foreign cash was above average late last week.

Write to Andrey Ostroukh at

Credit: By Andrey Ostroukh And Chiara Albanese

Subject: Central banks; Rubles; Population; Currency; Crude oil prices

Location: Russia

Company / organization: Name: Aberdeen Asset Management; NAICS: 523920; Name: Fischer Francis Trees & Watts; NAICS: 525110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628886331

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628886331?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

OPEC's War Won't Be All Over by Christmas; U.S. Oil Output Tends to Hold Up Despite Price Declines

Author: Denning, Liam

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract:

Oil's sudden slide will cause growth in U.S. oil output to slow, but stopping it altogether would take a protracted period of low prices, at least through the end of next year.

Links: 360 Link to Full Text

Full text:

Like invasions of Russia and land battles in Asia, a war on U.S. shale promises to be a protracted and unpredictable campaign.

Rising U.S. shale oil output is one target of Saudi Arabia's push to have OPEC members maintain their output and so . Even leaving aside OPEC's clutch of internal divisions, though, --with substantial attrition on the cartel's side.

Part of OPEC's problem is that U.S. shale is a many-headed beast, with multiple resource basins and operators. So there isn't a single price below which production gets shut down. Rather, estimates of break-even prices in U.S. shale span a range: Citigroup, for one, estimates this to be around $70 to $90 a barrel using full-cycle costs.

"Full-cycle costs" is the crucial phrase, as it incorporates big up front charges such as acquiring land. In core shale regions where land and infrastructure is already locked up, the cost to keep drilling could be as low as $40, Citi estimates. Benchmark U.S. crude now trades at about $68.

Look at oil's last big collapse, from almost $150 to less than $40 a barrel between the summer of 2008 and early 2009 amid the financial crisis: The number of oil rigs operating in the U.S. dropped by more than half. Yet production, on a trailing 12-months basis, merely dipped from about 5.1 million barrels a day to 5 million--before starting the surge toward the current level of about 8.5 million. Similarly, while the U.S. rig count collapsed by 85% between 1981 and 1986, output didn't start falling sustainably until February 1986.

In failing earlier to stop oil running up above $100 a barrel, OPEC let the shale genie out of the bottle. As Bob Brackett at Sanford C. Bernstein writes, a war on shale "simply postpones the date in which a well is drilled."

Oil's sudden slide will cause growth in U.S. oil output to slow, but stopping it altogether would take a protracted period of low prices, at least through the end of next year. Even then, the techniques and discoveries already made would simply pass to another set of players--most likely oil majors scooping up distressed exploration and production firms.

Meanwhile, those OPEC members living day to day, such as Venezuela, are likely to be the first big casualties of this war.

Credit: By Liam Denning

Subject: Petroleum industry; Cartels

Location: United States--US Russia Asia Saudi Arabia

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: Citigroup Inc; NAICS: 551111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628968860

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628968860?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Europe Can Relax, a Little, About Falling Inflation; Declines in price spured by cheaper oil can help economies rebound.

Author: Heise, Michael

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]perhaps most importantly, ultralow interest rates discourage savings for retirement and slow down the growth of existing pension assets. [...]those eurozone countries that went through excessive price and cost increases before 2009 are in the process of correcting them.

Links: 360 Link to Full Text

Full text:

The fall in the prices of oil and various other commodities is set to push eurozone inflation further toward zero in the coming months. This is creating enormous political pressure on the European Central Bank to act, including mounting calls for further quantitative easing that would include purchases of sovereign bonds. The ECB itself has contributed to the expectation that it can and will bring inflation back to its close-to-2% benchmark soon.

But such policies are not cost-free. They encourage risk taking among investors searching for yield, potentially leading to malinvestment. They affect the distribution of income and wealth between the less affluent, who are most affected by low returns on bank deposits, and the wealthier, who tend to benefit most from rising share prices. Finally, perhaps most importantly, ultralow interest rates discourage savings for retirement and slow down the growth of existing pension assets.

The ECB should incur these economic costs only if there's a compelling reason to do so. Yet the current debate about deflation misses several key points, raising the prospect that the ECB could further distort the European economy to fight a "problem" that isn't so problematic after all. Falling inflation rates in the eurozone are only partly explained by weak demand during the past two years. The ECB should consider other important, and presumably temporary, factors.

First, the fall in the prices of oil and other commodities since 2011 has directly translated into lower consumer-price inflation through lower prices for gasoline, other oil products, and food. Falling commodity prices also affect broader producer prices, as lower costs for energy and other inputs are passed through to sales prices in manufacturing and other sectors of the economy. In well-functioning markets, a prolonged downward trend in commodity prices, as we have seen, also lowers so-called core inflation, which excludes energy and unprocessed food.

Second, those eurozone countries that went through excessive price and cost increases before 2009 are in the process of correcting them. Lower inflation or slight deflation in Greece, Ireland, Portugal and Spain are not a sign of damaging deflation. They are necessary to restore the purchasing power of people whose wages and incomes have declined and to improve these economies' competiveness on international markets. Once these countries recover, downward price pressures will disappear.

It is difficult to quantify the impact these two developments have had on inflation. But assume that commodity prices in 2014 stayed at their average 2013 levels and that inflation in the eurozone's peripheral countries remained at 2%. The combined inflation impact of stable commodity prices and a lack of rebalancing in the periphery could easily be around 1%. In other words, inflation would today stand not at 0.4% but at 1.4%, far from the alleged dangers of deflation.

The ECB also shouldn't be unduly concerned about low inflation expectations. Having declined somewhat in recent months, inflation expectations for the five-year horizon are currently somewhere between 0.7% (as indicated by bond prices) and 1.8% (as reported by surveys among forecasters). Inflation expectations among financial market participants do seem to be worryingly low. They are, however, also influenced by volatile oil and commodity prices. When oil prices drive down inflation, they also drive down inflationary expectations. There is a high correlation between actual inflation and inflationary expectations for the next two to five years. Inflationary expectations, in other words, are a dependent variable.

These facts have several implications for the ECB. One is that central bankers should better manage market expectations by making it clear that changes in monetary policy can take two to five years to feed through into inflation. The ECB's tendency to overpromise has led to market demands that it deliver higher inflation faster, creating a needless challenge to the bank's credibility.

Meanwhile, the ECB's inflation target needs recalibrating. Because the ECB has promised inflation of nearly 2%, it faces growing calls to deliver. It would be better to return to the stability definition the ECB used before a strategy change in 2003, which was to define price stability as inflation "below 2%." That would allow greater discretion in light of phenomena such as falling commodity prices. Central banks need room to maneuver in both directions. When commodity prices rose in 2011, eurozone inflation went up to 3%. The ECB, rightly, did not react by tightening significantly.

If the ECB reverted to its previous, broader definition of price stability under present circumstances, it might create additional uncertainty, and markets might worry about the ECB's commitment to keep inflation above zero. But at least the ECB could be more explicit about which deviations from its close-to-2% target are worrisome and which are not only tolerable, but potentially positive for the economy. If oil and commodity prices continued to fall in 2015, the result could be an inflation rate below 0.5%. This would be no failure of the ECB but rather would help the recovery. It is the ECB's job to explain this. Otherwise, analysts and investors will continue to demand that it counteract falling commodity prices by launching a quantitative easing program.

Mr. Heise is chief economist of Allianz SE.

Credit: By Michael Heise

Subject: Inflation; Monetary policy; Central banks; Prices; Cost control; Eurozone

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1628978660

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628978660?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Making 'The Moral Case for Fossil Fuels'; Renouncing oil and its byproducts would plunge civilization into a pre-industrial hell--a fact developing countries keenly realize.

Author: Philip Delves Broughton

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.

ProQuest document link

Abstract:

Which would be worse: a hostile foreign regime using a sinister magnetic pulse to take down the entire electrical grid--or the chief executives of the world's major oil companies having a collective personal crisis about carbon emissions, shutting down their operations, and sending their employees to live the rest of their days off the grid in rural Vermont? In "The Moral Case for Fossil Fuels" the author, an energy advocate and founder of a for-profit think tank called the Center for Industrial Progress, suggests that if all you had to rely on were the good intentions of environmentalists, you would be soon plunged back into a pre-industrial hell.

Links: 360 Link to Full Text

Full text:

Which would be worse: a hostile foreign regime using a sinister magnetic pulse to take down the entire electrical grid--or the chief executives of the world's major oil companies having a collective personal crisis about carbon emissions, shutting down their operations, and sending their employees to live the rest of their days off the grid in rural Vermont? Either way, the country goes dark. Transportation stops. Schools, hospitals and businesses close down. We are left to grow our own scrawny vegetables and slaughter our own animals for meat. We cannot even text.

If you drive a car, or use modern medicine, or believe in man's right to economic progress, then according to Alex Epstein you should be grateful--more than grateful. In "The Moral Case for Fossil Fuels" the author, an energy advocate and founder of a for-profit think tank called the Center for Industrial Progress, suggests that if all you had to rely on were the good intentions of environmentalists, you would be soon plunged back into a pre-industrial hell. Life expectancy would plummet, climate-related deaths would soar, and the only way that Timberland and Whole Foods could ship their environmentally friendly clothing and food would be by mule. "Being forced to rely on solar, wind, and biofuels would be a horror beyond anything we can imagine," writes Mr. Epstein, "as a civilization that runs on cheap, plentiful, reliable energy would see its machines dead, its productivity destroyed, its resources disappearing."

When you consider that most of us live what we would consider decent, moral lives, it seems extraordinary that anyone feels it necessary to write a book called "The Moral Case for Fossil Fuels." We use fossil fuels and their by-products in everything we do and rarely consider it a vice. A pang of conscience may strike us when we read of oil spills or melting icebergs. But not when we are sitting on a plastic chair, visiting a power-guzzling hospital or turning on our computers. To call fossil fuels "immoral" is to tarnish our entire civilization and should plunge us all into a permanent state of guilt, which seems a bit strong.

Yet, as Mr. Epstein notes, this is precisely what so many vocal environmentalists do. James Hansen, one of the most prominent climate scientists, has called for oil-company CEOs to be "tried for high crimes against humanity and nature." Author and environmentalist Bill McKibben wrote in 2012 that "we need to view the fossil-fuel industry in a new light. It has become a rogue industry, reckless like no other force on Earth. It is Public Enemy Number One to the survival of our planetary civilization."

But in demonizing fossil fuels, Mr. Epstein argues, environmentalists elevate the importance of preserving nature over the quality of human life. Our use of fossil fuels, Mr. Epstein says, correlates with dramatic increases in life expectancy and income, especially in the developing world. No other technology available to us today can meet the energy needs of everyone on the planet. The average American uses machine energy of 186,000 calories per day, equal to that produced by 93 physical laborers, and the vast majority of this is produced by fossil fuels. These fuels, Mr. Epstein writes, have turned us into "supermen" compared to our ancestors. "Mankind's use of fossil fuels is supremely virtuous--because human life is the standard of value, and because using fossil fuels transforms our environment to make it wonderful for human life."

Mr. Epstein argues that our history with fossil fuels has been one of constant innovation and improvements in technology. Not only do we keep finding more sources of energy, nixing the predictions of those who say we are about to run out, but we find ever cleaner, more efficient ways to use it. Keep on this path and outcomes for humans and the environment are likely to be much better than if we veer off into an uncertain wind and solar future. Better for the polar bears, too. Mr. Epstein calls his philosophy "antipollution but pro-development," which seems positive terrain, though a more extreme ideology does peek out at times. (Quoting Ayn Rand's "Atlas Shrugged" is not a good idea if you are trying to pitch yourself as a moderate.)

Mr. Epstein's book is, among other things, a full-throated defense of what is, after all, the American way of life. At the very least, it provides a useful thought experiment, creating a framework in which it is acceptable to do more than boo-hoo at the latest chunk of ice sliding off the Arctic Circle. The most frequently proposed solution to our melting ice caps, for instance, is to reduce global carbon emissions by heavily taxing carbon and investing more in renewable energy. But what might this mean for the recent boom in domestic energy, the abundant oil and gas now being extracted from shale deposits across America? The "shale gale" is driving domestic growth and transforming America's role in the Middle East and its balance of power with other energy giants, such as Russia and Iran. Should all this newfound economic and geopolitical muscle be abandoned in favor of solar power?

Falling oil prices may yet temper the shale gale more effectively than any new environmental rules, but Mr. Epstein's defense of fossil fuels leads us to probe at the trade-offs we are willing to make--and to inquire whether other countries would as well. To argue for lower carbon emissions is usually to walk into a giant hypocrisy trap. How the Indonesians must have laughed when they were told to hold back on their fossil-fueled economic ascent by John "Five Homes" Kerry! By first accepting and then welcoming the role of fossil fuels in our lives, we can move on to a more interesting discussion about the balance between human welfare and our faith in--or distrust of--technology's evolution.

Until then, Alex Epstein's moral defense of the means we choose to power our societies forward is a pointed, necessary and surprisingly little-heard one.

Mr. Delves Broughton is the author, most recently, of "The Art of the Sale: Learning From the Masters About the Business of Life."

Credit: By Philip Delves Broughton

Subject: Fossil fuels; Energy policy; Life expectancy; Civilization

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 1, 2014

Section: Life and Style

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629021212

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629021212?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Lower Oil Prices Will Help Boost Global Economy, IMF's Lagarde Says; IMF Chief Expects Low Prices to Advance U.S. Economy to 3.5% Pace Next Year

Author: Sparshott, Jeffrey

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

WASHINGTON--International Monetary Fund chief Christine Lagarde on Monday said falling oil prices will help boost economies in the U.S. and across much of the globe, a net positive for a world struggling with slowing growth.

Links: 360 Link to Full Text

Full text:

"It is good news for the global economy," Ms. Lagarde said at The Wall Street Journal CEO Council annual meeting.

Oil prices tumbled to multiyear lows last week after the Organization of the Petroleum Exporting Countries its production quotas, rather than lowering its output target. Lower oil prices are good for most consumers, who pay less for gasoline, but could squeeze energy companies and the economies of some major producers like Russia and Venezuela.

For the U.S., lower energy prices will help accelerate economic growth to a 3.5% pace next year, Ms. Lagarde said, up from an October forecast of 3.1%.

The U.S. economy has been stuck at around 2% annual growth since the recession officially ended about 5½ years ago--gross domestic product expanded 2.2% in 2013 and 2.3% in 2012.

While the U.S. appears to be a bright spot in the world, other nations are struggling.

The eurozone still faces high unemployment, wary consumers and painfully weak economies among 18 member states. Japan slipped into recession in the third quarter. Emerging economies also have shown signs of trouble. China's gross domestic product grew by 7.3% in the third quarter from a year earlier, its slowest pace in more than five years, and India decelerated to 5.3% from 5.7% the prior quarter.

Europe also is expected to benefit from lower oil prices, though the eurozone also faces a risk of the "new mediocre," Ms. Lagarde said, describing an economy marked by slow growth, low inflation and high unemployment.

To break out, reluctant political leaders need to adopt more job-friendly labor market reforms, aggressive and innovative monetary policy and other structural reforms, she said.

"Where they are at the moment they need to use all available tools," Ms. Lagarde said. "They have to get on with it and do it."

Ms. Lagarde also took Japan to task for slow implementation of fiscal and labor market reforms.

One key area for Japan: opening up its labor force to women and immigrants. "There is no slack in the Japanese economy, so when they do stimulus, when they put money into the construction business for instance, there is nobody to build," she said.

Falling energy prices won't help everyone.

"Winners and losers--exporters are taking a hit," she said.

For Russia, lower prices are "adding to their fragility and their vulnerability," Ms. Lagarde said.

Write to Jeffrey Sparshott at

Credit: By Jeffrey Sparshott

Subject: Petroleum industry; Statistical data

Location: Russia United States--US Venezuela

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: US

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629026943

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629026943?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Oil Search Bids for Talisman's Papua New Guinea Assets; Firm Offers More Than $300 Million for Talisman's PNG Assets

Author: Winning, David

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

A deal could help Oil Search secure enough gas to justify a new pipeline and processing unit at the $19 billion PNG LNG export plant operated by Exxon Mobil Corp. For Talisman, a deal would help it meet a goal of $2 billion in asset sales by mid-2015.

Links: 360 Link to Full Text

Full text:

SYDNEY--Oil Search Ltd. has bid more than $300 million to buy the Papua New Guinea assets of Talisman Energy Inc., in a move that could accelerate an expansion of the Pacific nation's flagship gas-export facility, people familiar with the matter said.

Oil Search hopes to add Talisman's natural-gas reserves in the flat western region of Papua New Guinea to its own P'nyang discovery in the densely forested highlands area. A deal could help Oil Search secure enough gas to justify a new pipeline and processing unit at the $19 billion PNG LNG export plant operated by Exxon Mobil Corp.

For Talisman, a deal would help it meet a goal of $2 billion in asset sales by mid-2015. Last month, the Calgary, Alberta-based company grouped Papua New Guinea with the U.K. North Sea and Iraqi Kurdistan as assets where it was "actively pursuing exit or performance improvement."

"There are no viable offers that we are considering at the moment," Grant Christie, general manager of Talisman's Australasian unit, told The Wall Street Journal on the sidelines of a conference in Sydney. Oil Search Chief Executive Peter Botten declined to comment on the recent bid.

Papua New Guinea, a country better known for its jungles and tribal society, became the world's newest major energy exporter when the PNG LNG project shipped its first cargo to Asia in May. The project is one of several in the broader region including Australia, which are expected to start up over the next three years and mark a shift in the global liquefied natural gas trade away from the Middle East.

Work began on the PNG LNG project in 2010, when Asian gas users were looking to increase imports of fuels that burn more cleanly than coal, and international energy companies were struggling to gain access to resources not owned by foreign governments. The industry's landscape has changed dramatically since then--North American companies now are looking to export shale gas, and China this year signed a $400 billion deal to buy gas from Russia.

Despite a recent sharp fall in crude-oil prices that is hurting returns on LNG projects, Oil Search is championing an expansion of PNG LNG by adding more processing units--each known as a "train." Prices of LNG are often linked to movements in crude futures, especially in Asia.

In October, Oil Search talked up the prospects of a new train that would use gas from P'nyang and discoveries made by other energy companies nearby. The company said it needed two trillion cubic feet of proven gas reserves to justify building the so-called North Western Hub train, and it was looking to make a decision on construction by the end of 2016 and begin gas production as early as 2019.

Other companies with gas discoveries in the western region of Papua New Guinea include Horizon Oil Ltd. and Kina Petroleum Ltd. Japan's Mitsubishi Corp. is also an investor, thanks to a $280 million deal to buy stakes in nine of Talisman's natural-gas blocks two years ago.

In a speech to the conference on investment in Papua New Guinea's resources industry on Monday, the country's Prime Minister Peter O'Neill said he was also seeking progress on the development of gas discoveries considered to be stranded because they aren't connected to a pipeline or the PNG LNG plant.

Talisman had once hoped to be heavily involved in that development. The company invested aggressively to expand its footprint with a view to aggregating several natural-gas discoveries, including the $177 million takeover of Rift Oil PLC in 2009.

However, management became frustrated by repeated delays in the development of that gas and condensate, a type of light oil, Mr. Christie said.

Write to David Winning at

Credit: By David Winning

Subject: LNG; Natural gas reserves; Petroleum industry; Energy policy

Location: Asia Papua New Guinea

Company / organization: Name: Talisman Energy Inc; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629026944

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629026944?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Rebound, but Bears Still Abound

Author: Friedman, Nicole

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Dec 2014: C.2.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

U.S. oil prices posted their biggest one-day gain in two years on Monday as traders locked in profits on bearish bets following last week's selloff.

But many market watchers were skeptical that Monday's gains signaled that oil prices had reached their bottom, pointing to global supplies that continue to overwhelm demand.

Oil prices tumbled to multiyear lows after the Organization of the Petroleum Exporting Countries on Thursday said it would maintain its production quotas, rather than lower its output target to support prices.

Many investors and analysts believe with OPEC on the sidelines, it will take cutbacks by companies in the U.S. and Canada to bring supply and demand in line and pull the market out of its swoon. That day may not come until deep into 2015 or beyond, some analysts say.

"The era of $100 [a barrel] oil is over," Citigroup Inc. said in a note. "Oil prices appear to be falling rapidly to -- if they haven't already reached -- production costs."

On Monday, light, sweet oil for January delivery shot up 4.3% to $69 a barrel from Friday's close, recovering from a more-than-five-year low below $64 a barrel hit in overnight trading. It was the biggest one-day percentage gain for the U.S. benchmark since August 2012. Brent futures, the international benchmark, gained 3.4% to end at $72.54 a barrel.

Roland Austrup, who manages $54 million as chief executive of Integrated Managed Futures Corp., said his funds posted 6% gains in November, largely due to a bet that oil prices would fall. After last week's selloff, he kept his wagers on lower oil prices but used options to reduce losses in case prices rose.

"Anytime you get a big significant move like this, it's prudent to hedge," Mr. Austrup said. "It certainly doesn't reflect a view that it's over. . . . There's no impetus for prices to go up."

Volatility in the oil market has caught some funds off guard. Brevan Howard Asset Management LLP plans to close its $630 million commodity hedge fund after the fund suffered heavy losses in energy markets in September, people familiar with the fund said Saturday.

The slump in oil prices is pressuring energy companies, and analysts and bankers expect a string of deal making as highly levered companies become attractive for acquisition.

Upcoming macroeconomic reports "will be looked at as a demand indicator and the energy market will adjust itself accordingly," Mr. Yawger said.

But without action from OPEC, the market will remain oversupplied, said Barclays in a note. Barclays lowered its oil-price forecasts for this year and next after the OPEC meeting, as did BNP Paribas SA and Citigroup. Barclays now expects Brent prices to average $72 a barrel next year, while BNP forecasts $77 a barrel. Citi estimates $80 a barrel.

"It will have to endure a volatile adjustment period while non-OPEC supply, demand and even some OPEC producers adjust," analysts at Barclays said.

January reformulated gasoline blendstock, or RBOB, rose 5.34 cents, or 2.9%, to $1.8810 a gallon.

January diesel gained 5.12 cents, or 2.4%, to $2.2124 a gallon.

---

Matt Wirz, Laurence Fletcher, Chiara Albanese and Michael Calia contributed to this article.

Credit: By Nicole Friedman

Subject: Petroleum industry; Profits; Futures; Commodity prices; Crude oil

Location: United States--US

Company / organization: Name: Citigroup Inc; NAICS: 551111

Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.2

Publication year: 2014

Publication date: Dec 2, 2014

column: Commodities Report

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629154869

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629154869?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Russia Sees Economy in Recession Next Year; Sanctions, Falling Oil Prices Knocks Ruble to Record Low Against the Dollar

Author: Ostroukh, Andrey

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

MOSCOW--Russia's Economy Ministry warned that the country will slip into recession next year and the ruble will remain weak, in the government's strongest admission yet of the depth of the damage wrought by the drop in oil prices and .

While many private and foreign economists have been warning of a contraction for weeks, the government had stuck to its forecasts that Russia would eke out slow growth next year. But the sharp drop in oil prices--which has knocked the ruble to a record low of 54 rubles to the dollar on Tuesday--has dashed remaining hopes.

The latest forecast drew quick criticism from the Finance Ministry which called it 'too gloomy' and said it could be revised. A few hours after being published, the report disappeared from the Economy Ministry's website in a move a spokesman said was 'technical.'

The Economy Ministry said Tuesday it sees the economy shrinking by 0.8% in 2015 compared with earlier expectations for recovery in economic growth to 1.2% from around 0.5% this year. A month ago the central bank called for zero growth next year.

The new forecast comes as Russia is on track to post its weakest growth since the global financial crisis this year, pressured by the penalties imposed by western countries after Moscow's annexation of Crimea and its alleged in Eastern Ukraine. The Kremlin denies backing the rebels.

Plunging oil prices are taking their toll too. The ruble tumbled to a record low against the dollar on Tuesday and is down nearly 40% year-to-date following below $70 a barrel from more than $100 in the summer. Oil and gas exports are Russia's main source of foreign-currency revenues.

A contraction in GDP next year would be the first time the Russian economy has shrunk since 2009.

"We changed our forecast from growth to recession about two months ago due to negative dynamics in investment and declining oil prices. Our forecast envisages a 1.5% contraction in the economy next year," said Vladimir Osakovsky, chief economist at the Bank of America Merrill Lynch in Moscow.

"I think that Russia's economy is vulnerable to three sorts of crisis--structural, conjectural and geopolitical," said Deputy Economy Minister Alexei Vedev.

The Economy Ministry said it had previously expected some respite in terms of external pressure on the Russian economy by mid-2015 but now it expects the Western sanctions to still be in place by 2016.

The ministry lowered an average 2015 oil price forecast to $80 per barrel from $100 per barrel. Such a revision is expected to keep an average ruble rate in 2015 at 49 per dollar compared with earlier expectation of 37.7. The real effective ruble rate is expected to weaken by 13.5% next year.

"The basic assessment is that the exchange rate will stabilize at least at current levels... There's a feeling that oil prices will recover to $85-$95 by the middle of next year," Mr. Vedev said.

The Finance Ministry said that the Economy Ministry exaggerates downside risks to the ruble. Finance Minister Anton Siluanov said the dollar will be trading below 45 rubles next year if an oil price averages $80 per barrel.

Maxim Oreshkin, head of strategic planning department at the finance ministry, said the ruble will enjoy "favorable conditions" early next year thanks to better balance of payments as imports are set to shrink after the recent depreciation in the Russian currency. But that requires a steady oil price, Mr. Oreshkin said, adding that the current ruble rate matches oil prices of significantly below $60 per barrel.

The Economy Ministry also said Tuesday it increased assessment of 2014 net capital outflow to $125 billion from $100 billion and 2015 outflow to $90 billion from $50 billion. Again, the Finance Ministry said it doesn't agree and sees 2015 net outflow at between $60 billion and $80 billion.

Capital investment is now seen contracting by 3.5% next year versus an earlier call for 2% growth. The economy ministry also lowered forecasts for households' wealth. It sees real disposable incomes contracting by 2.8% next year compared with previous expectations for 0.4% growth. In another sign of economic crisis, 2015 unemployment rate is now seen reaching 6.4% compared with previous forecast of 6.1%.

Looking further, the Economy Ministry expects the GDP slump to reach the bottom in mid-2015. Mr. Oreshkin said the current economic deterioration was akin to 2009 and under an optimistic scenario the economy will rebound and grow by 2.5%-3% in 2016.

Write to Andrey Ostroukh at

Credit: By Andrey Ostroukh

Subject: Rubles; Recessions; International finance; Energy economics; Economic development; Economic conditions; Crude oil prices

Location: Russia

People: Putin, Vladimir Fico, Robert Merkel, Angela

Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Economy

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629272343

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629272343?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Iraq and Kurdistan Agree on Oil Deal; Move Signals End to a Yearslong Political Impasse

Author: Bradley, Matt; Kent, Sarah; Adnan, Ghassan

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

BAGHDAD--The Iraqi government agreed Tuesday to an oil export deal with the northern region of Kurdistan, signaling an end to a yearslong political impasse that has nearly bankrupted both governments and hobbled efforts to fight the Islamic State insurgency.

The broad deal would allow Baghdad and Erbil, the capital of the Kurdish Regional Government or KRG, to mend broken relations that have put the defense of the country against Islamic State on shaky ground. The accord is also likely to further muffle voices in Iraqi Kurdistan that only six months ago had called for a referendum on the region's independence from Baghdad.

"This agreement represents a victory for all Iraqis," said Masoud Haidar, a Kurdish member of the parliament in Baghdad. "There are no losers in this agreement. All are winners."

Obama administration officials hailed the oil agreement Tuesday as a crucial advance in Baghdad's efforts to improve relations with Iraq's Kurdish minority.

U.S. officials have pressed Iraqi Prime Minister Haider al-Abadi, a Shiite politician who took office in September, to build bridges to his country's Kurdish and Sunni population and buttress the war against Islamic State militants. The Kurdish security forces, the Peshmerga, are close ally of the Pentagon in the fight against Islamic State, which is also known as ISIS or ISIL.

U.S. officials have also been working to ensure the KRG doesn't move forward with its threats to hold a referendum on independence.

"This resolution, in line with its constitution, allows all Iraqis to benefit equitably from Iraq's hydrocarbon sector," said Marie Harf, a State Department spokeswoman. "This agreement will further strengthen both Iraq's federal government and the Kurdistan Regional Government as they work together to defeat ISIL."

Under the new agreement, which comes into effect on Jan. 1, Kurdistan will export 250,000 barrels of oil a day and the disputed province of Kirkuk--now under Kurdish control--will export 300,000 barrels a day, said Abdel Qadr Mohammed, a Kurdish member of the Iraqi parliament's finance committee, who participated in the negotiations.

Those exports will flow through Iraq's national oil company, the State Organization for Marketing of Oil, or SOMO, marking a win for Iraq's central government, which has long sought to exercise more control over Kurdish oil exports and revenue.

In return, Tuesday's compromise would see the KRG keep 17% of Iraq's budget expenditure, nearly a year after Baghdad halted payments to the region in retaliation for its of Baghdad on the global market.

That percentage, based on estimates of Kurds' share of Iraq's total population, reflects the fiscal arrangement laid out in the 2005 constitution. By hewing closely to those parameters, established under U.S. occupation, the agreement showed that Iraq's worst security crisis in recent memory has helped shift the country toward a renewed unity.

"With the threat of ISIS bearing down on all of us, it was necessary for both sides to come to an agreement in any way," said Razaq al Haidari, a Shiite politician from the ruling State of Law bloc.

Though the deal is largely about oil, observers agreed that concern over the insurgency made it possible.

"This is an oil deal that is motivated by security conditions and the need for some sort of political unity against ISIS," said Ahmed Ali, a researcher for the Washington-based Institute for the Study of War. "At the end of the day, the realization on both side is that the ISIS threat is so great that a unified front is the major recipe to defeating it."

The deal satisfies many of the Kurds' outstanding demands, giving them profits from what they consider their own oil, a greater say in how Iraq's oil industry is administered, and additional funding and recognition for their semiautonomous defense forces.

The settlement also marks Baghdad's most formal step toward recognizing the disputed province of Kirkuk as a formal part of Kurdistan since Kurdish forces effectively seized the area during Islamic State's initial blitz in June. By positioning Kirkuk's oil as a part of Tuesday's agreement, Baghdad tacitly forfeited its control over Kirkuk's oil to Erbil.

In addition to Baghdad according a portion of Iraq's budget to Kurdistan, the deal calls for the Iraqi defense ministry to give a direct monthly payment to Kurdish fighters, known as the Peshmerga, to train and arm them in their fight against Islamic State, said Kawa Mahmoud Mawloud, a Kurdish member of the oil and gas committee in parliament.

Before Tuesday's deal, the Kurdish fighters had been financed and were mostly managed independently of Baghdad.

The deal isn't a wholesale solution to Iraq's fractured national polity. Governance in Baghdad has long been paralyzed by divisions among Sunni Arabs, Shiite Arabs, Kurds and a many smaller religious and ethnic groups. But the agreement demonstrates the unifying potential of Mr. Abadi. With support from Washington, he assumed the premiership in September followed the eight-year rule of Nouri al-Maliki, whose leadership was marked by sectarian and ethnic discord, corruption and worsening security.

Tuesday's deal had seemed almost impossible until last month.

The long-simmering dispute came to a head early this year after Baghdad cut off budget payments to the KRG, which began exporting large volumes of oil for the first time via a pipeline to Turkey.

Efforts by U.S. diplomats to broker a compromise fell apart amid mutual distrust, with both sides unable to agree on who should control the oil's marketing and revenue.

Kurdistan-focused oil stocks have languished this year as the political tensions with Baghdad left the KRG struggling to meet its payment obligations and the Islamic insurgency buffeting the country threatened operational security.

Oil markets saw the first glimmer of a deal three weeks ago, when Mr. Abadi and Kurdish delegates--supported by American and regional diplomats--agreed to an interim deal that saw Baghdad pay $500 million to the Kurds in exchange for 150,000 barrels a day of oil.

The good-faith payments opened a floodgate of concessions, said Mr. Haidari, the Shiite lawmaker. Kurds dropped their demands for huge payments from Baghdad, while Baghdad stopped its requests to micromanage Kurdish contracts with foreign oil firms, he said.

Shares in such as Genel Energy PLC and Gulf Keystone Petroleum Ltd. surged Tuesday on news of the deal and after the KRG made initial payments to some companies for oil exports.

Though good news for Iraqi unity, the deal is likely to add to the downward tailspin in the oil market, with the additional barrels from Kirkuk set to augment the already ample supply on the market.

Oil prices have amid sluggish demand growth and a boom in oil production in North America, but major oil producers in the Organization of the Petroleum Exporting Countries have shown little sign that they intend to pull back their own output to support prices.

When OPEC met in Vienna last week the group decided to , sparking a rout in the oil market. Iraq, the group's second-largest producer after Saudi Arabia, imade it clear it wouldn't consider reducing its oil output, which remains below levels reached in the 1970s before Saddam Hussein came to power.

Iraq's oil minister Adel Abdul-Mehdi told reporters in Vienna last week that Iraq is targeting production of around 3.8 million barrels a day next year, an increase of around 500,000 barrels a day compared with its production in October, according to the International Energy Agency. Oil exports from the Turkish port of Ceyhan via Iraqi Kurdistan have already reached over 350,000 barrels a day, according to Genel Energy, but the deal with Baghdad should boost that figure by 200,000 barrels a day come January.

Jay Solomon contributed to this article.

Write to Matt Bradley at

Credit: By Matt Bradley, Sarah Kent and Ghassan Adnan

Subject: Kurds; Petroleum industry; Agreements; Politics; Rebellions

Location: Kirkuk Iraq United States--US Iraq

People: Harf, Marie al-Abadi, Haider

Company / organization: Name: Department of Defense; NAICS: 928110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629272401

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629272401?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

European Markets Boosted by Energy Stocks; Oil Prices Ease After Monday's Late Rebound

Author: Stubbington, Tommy; Cox, Josie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

Germany's DAX index, which was hit particularly hard by a slowdown in global growth and fears that tensions with Russia would hurt German firms, briefly rose above 10,000 points on Tuesday, just short of the record level it reached in June, before dropping back to 0.2% lower on the day.

Links: 360 Link to Full Text

Full text:

Energy stocks led European markets higher Tuesday, with investors eager to lock in profits after a brief pickup in oil prices during the previous session.

Following a week of particularly heavy losses that saw the cost of Brent crude tumble by around 13%, prices recovered somewhat on Monday, and even though the rise proved short-lived, investors were quick to move.

Shares in Afren PLC, Premier Oil and Tullow Oil PLC--some of the companies hardest hit by the recent commodity slump--ended the session up between 6% and 8.3%.

Genel Energy PLC was the biggest winner on the Stoxx Europe 600, up 12.7%, that it had received a portion of the $24 million it is due for its share of oil sales from two fields in Kurdistan--breaking an impasse on payments amid political wrangling between Kurdistan and Iraq over oil exports.

"We have seen a capitulation of the energy sector in the last few days," said Christian Stocker, an equity strategist at UniCredit. "This move looks like short-term relief," he added.

The European index of oil and gas companies advanced around 3.2% on the day, helping the all-sector index to a 0.5% gain, even though Brent crude was back on a downward trajectory.

At the European equity market close, the commodity was trading around $71.53 per barrel, well above Monday's five-year low of $67.53 but still down more than 35% so far in 2014.

Analysts at Barclays said they now expect Brent crude to settle below $70 because of last week's decision by the Organization of the Petroleum Exporting Countries to and other banks have struck a similarly downbeat note on the price.

The outcome of the OPEC meeting is "unambiguously bearish for oil prices," Société Générale economists wrote in a note advising investors to generally stay away from oil and oil-related assets.

Rabobank strategists described Monday's move in Brent as a "dead-cat bounce" adding: "It's highly unlikely that the market has suddenly discovered some new information to reverse its previous bearish bet on oil; as such, it would seem more likely that the rest of the week will see a return to the momentum we were seeing before that reversal."

Currencies from economies particularly dependent on oil took yet another beating on Tuesday too.

The Russian ruble against the U.S. dollar of above 54 per dollar, as did Nigeria's naira. The Canadian dollar and the Norwegian krone also took fresh knocks.

"Our base case scenario is that oil will likely bottom out at $60 a barrel, a level at which we believe the ruble fairly valued at 55 against the dollar," said BCS economist Vladimir Tikhomirov.

Beyond oil, however, markets were able to recover from Monday's fall, which came after some from the eurozone and China.

Despite the latest signs that the region's economic recovery is sputtering, markets have clawed back nearly all their losses from a heavy third-quarter selloff.

A recent improvement in German business climate surveys has lured investors back to German stocks, while the country--which is a large energy importer--should be among Europe's chief beneficiaries of a lower oil price, according to Mr. Stocker.

Investors are now looking ahead to Thursday's European Central Bank meeting. The recent drop in energy prices is a further drag on already low inflation, heaping pressure on the central bank to step up its easing efforts.

"Eurozone inflation expectations have continued to collapse in the aftermath of last week's OPEC meeting," currency strategists at BNP Paribas said.

Azad Zangana, senior European economist at Schroders, said that the oil slump was pushing "inflation to dangerously low levels."

In currency markets, the euro was 0.7% lower against the dollar at $1.2387.

Gold, meanwhile, fell 1.6% to $1,198.30 an ounce in late trade. The precious metal had a volatile session on Monday, falling after a proposal that would have forced their central bank to buy more gold, before rebounding sharply.

Write to Tommy Stubbington at and Josie Cox at

Credit: By Tommy Stubbington and Josie Cox

Subject: Central banks; Petroleum industry; Stock exchanges; Investments; Crude oil prices; Eurozone

Location: United States--US

Company / organization: Name: BNP Paribas; NAICS: 522110; Name: European Central Bank; NAICS: 521110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629272469

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629272469?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Norway Considers Investing Oil Fund in Infrastructure; It Would Be First Expansion in Fund's Asset Classes Since 2010

Author: Hovland, Kjetil Malkenes

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

The fund had invested only 1.3% of its value in real estate by the end of the third quarter, mainly in high-end office buildings in Europe and the U.S. It plans to buy property assets amounting to 1% of its value, or about $8.7 billion, in each of the coming two years, and will expand its workforce to 600 from less than 400, mainly to manage the real estate portfolio.

Links: 360 Link to Full Text

Full text:

OSLO--Norway is assessing whether to allow its sovereign-wealth fund to invest in unlisted infrastructure, potentially including railways, pipelines and power plants, a move that would expand its asset universe from stocks, bonds and real estate.

The country's Ministry of Finance, which oversees the $870 billion fund, said it would ask an expert group, the Strategy Council, to make an assessment of allowing infrastructure investments. It would be the first expansion of the fund's asset classes since a 2010 decision to allow it to invest up to 5% of its value in real estate.

"By further developing the fund's investment strategy so that we spread investments in the best way possible, we contribute to good, long-term management of the fund," Minister of Finance Siv Jensen said.

The Strategy Council will also be asked to assess whether the real estate limit of 5% should be increased. The fund had invested only 1.3% of its value in real estate by the end of the third quarter, mainly in high-end office buildings in Europe and the U.S. It plans to buy property assets amounting to 1% of its value, or about $8.7 billion, in each of the coming two years, and will expand its workforce to 600 from less than 400, mainly to manage the real estate portfolio.

At the end of the third quarter, the bulk of the fund, 61.4%, and the remainder, 37.3%, in bonds.

Norway's oil fund is the world's biggest sovereign-wealth fund and its investment strategy is closely watched by investors. The strategy has been developed gradually, and "this will also be the case for the assessment of whether it should be opened for investment in infrastructure," the Ministry of Finance said.

Norway's central bank, which manages the fund via its Norges Bank Investment Management arm, will also be asked for advice. The central bank has previously asked the government to allow the fund to expand into infrastructure.

Infrastructure investments will be addressed in the annual white paper about the sovereign-wealth fund next spring, and the recommendations from the Strategy Council will be addressed in the 2016 white paper, the government said.

The time frame indicates the Norwegian Parliament could make a final decision in the summer of 2016.

If the fund is allowed to invest in unlisted infrastructure, this could mean investments in emerging markets, with the potential risks of less protection of investors' rights and a lack of transparency. If it does move into such assets, the fund must balance risks and returns as with any other investment, the ministry said.

The Norwegian sovereign-wealth fund was set up in the 1990s to save the country's oil revenues, and is set to grow to 7.53 trillion Norwegian kroner ($1.08 trillion) by 2020.

Write to Kjetil Malkenes Hovland at

Credit: By Kjetil Malkenes Hovland

Subject: Owner operator; Investment policy; Infrastructure; Councils

Location: Norway

Company / organization: Name: Norges Bank Investment Management; NAICS: 523920

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629272515

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629272515?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Resume Skid as Supplies Weigh on Market; Iraq Government Agrees on Kurdistan Oil Deal

Author: Berthelsen, Christian

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

The two major benchmarks are off about 38% from 2014 highs hit in June, as the world market has become awash in an abundance of crude thanks to increased oil exports from Iraq and Libya among others, as well as shipments of refined petroleum products from the U.S. The market's slide deepened last week after ministers from member nations of the Organization of the Petroleum Exporting Countries failed to reach an agreement that would curtail output and shore up prices.

Links: 360 Link to Full Text

Full text:

Oil prices erased much of Monday's gains as an agreement between Iraq and the Kurdish regional government portends more supplies for a global market already brimming with crude.

Light, sweet crude for January delivery, the front-month contract, fell $2.12, or 3.1%, to $66.88 a barrel on the New York Mercantile Exchange on Tuesday. Brent crude, the global benchmark, fell $2, or 2.8%, to $70.54 a barrel on the ICE Futures Europe exchange.

Iraq and semiautonomous Kurds in the northern region of the country have been locked in a yearslong feud over sharing revenue from oil production, culminating with the Kurdish regional government exporting several cargoes independently of Baghdad this year through a pipeline to Turkey. But Iraqi media and a Kurdish lawmaker said Tuesday that .

The agreement, which would take effect Jan. 1, allows Kurdistan to export 250,000 barrels a day, while the disputed region of Kirkuk would sell 300,000 barrels a day through Iraq's national oil company. In exchange, the Kurdish region would receive 17% of Iraq's national budget, and the defense ministry would provide direct financing to Kurdish fighters for training and arms.

Andrew Lebow, a trader for investment bank Jefferies, said the oil market appeared to give credence to the agreement.

"The market may be taking this one more seriously than others," Mr. Lebow said. "This could result in more supply on the market, which is the last thing we need."

The news added to the already-bearish conditions in the oil market. The two major benchmarks are off about 38% from 2014 highs hit in June, as the world market has become awash in an abundance of crude thanks to increased oil exports from Iraq and Libya among others, as well as shipments of refined petroleum products from the U.S. The market's slide deepened last week after ministers from member nations of the Organization of the Petroleum Exporting Countries failed to reach an agreement that would curtail output and shore up prices.

Meanwhile, traders appeared eager to take profits from Monday's run-up, when U.S. oil prices gained 4.3% in the absence of any bullish fundamental developments in the market.

"We don't really have a fresh compelling fundamental story here," said Tim Evans, an analyst at Citigroup. "It's more a question of where does the price belong given the fundamentals we already know."

Those fundamentals look set to turn even more bearish in coming months, with analysts and traders saying a period of moderately priced oil is likely to prevail as a new normal for some time. London-based research consultant Energy Aspects said in a note that global surpluses will increase through the first half of 2015 as output rises and demand for OPEC crude falls.

In the U.S., analysts project a 600,000-barrel increase in crude stockpiles when weekly data are released by the Energy Information Administration on Wednesday. The U.S. has 383 million barrels of crude in storage, above average for this time of year.

In its own inventory survey, the industry trade group American Petroleum Institute said crude stockpiles fell 6.5 million barrels in the week ended Nov. 28, while gasoline stocks were flat, distillate stocks rose 2.5 million barrels and refinery runs rose 1.9 percentage points to 93% of capacity, according to a posting by Platts Oil on Twitter.

Tuesday's selloff carried over into other oil-related markets, with gasoline for January delivery falling 6.94 cents, or 3.7%, to $1.8116 a gallon, the lowest settlement price in more than five years.

January diesel settled at its lowest level in more than four years, losing 5.8 cents, or 2.6%, to close at $2.1544 a gallon.

Matt Bradley and Ghassan Adnan contributed to this article.

Write to Christian Berthelsen at

Credit: By Christian Berthelsen

Subject: Petroleum industry; Kurds; Agreements; Crude oil prices; Petroleum production

Location: United States--US Iraq

Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629281241

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629281241?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Tony Hayward's Genel Gets Kurdish Oil Payment; Move Breaks Impasse on Payments Amid Political Wrangling

Author: MacDonald, Alex

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

LONDON--Genel Energy PLC, the British oil explorer led by former BP PLC Chief Executive Tony Hayward, said it received a portion of the $24 million it is due for its share of oil sales from two fields in Kurdistan--breaking an impasse on payments amid political wrangling between Kurdistan and Iraq over oil exports.

Links: 360 Link to Full Text

Full text:

Mr. Hayward serves as chief executive of Genel, a company that has , including drilling in Kurdistan, a semiautonomous enclave in Iraq's north.

The company's shares have suffered in recent months, amid uncertainty about whether it and its partners would be able to monetize its investment in Kurdistan. Officials in Kurdistan have been locked in a standoff with the central government in Baghdad over how Kurdistan can sell its oil. Recent geopolitical turmoil, including the rise of Islamic State militants operating close to the Kurdish border, weighed further on sentiment.

In early trading Tuesday, Genel shares were up more than 7% in London.

Separately Tuesday, Iraq's central government in Baghdad said it had agreed to an with the Kurdistan Regional Government. The deal with Baghdad is likely to help smooth the way for future payments to oil firms operating there.

The KRG said at the start of November that it would make an initial payment of $75 million to companies operating in the region, as revenue from exports since January reached $2.87 billion. Earlier this year, the KRG started , often running up against political opposition from Baghdad.

In a statement, Genel said partners in the Taq Taq field received gross payments of $30 million. It also said partners in the Tawke oil field would receive another $30 million. Genel's total share of both payments comes to $24 million, it said.

Oil exports by pipeline from the Kurdistan region of Iraq through Turkey continue to grow and recently exceeded 350,000 barrel of oil a day, Genel said.

On Monday, Gulf Keystone Petroleum Ltd. said it received an initial $15 million payment from the KRG for crude oil exports from the Shaikan oilfield in Kurdistan.

"Gulf Keystone now looks forward to the establishment of a pattern of regular payments for export crude sales. In the meantime, the company continues to adopt a prudent approach to capital expenditure," Gulf Keystone said.

Write to Alex MacDonald at

Credit: By Alex MacDonald

Subject: Petroleum industry; Exports

Location: Baghdad Iraq Kurdistan Iraq

People: Hayward, Tony

Company / organization: Name: Gulf Keystone Petroleum Ltd; NAICS: 211111; Name: Genel Energy PLC; NAICS: 211111; Name: BP PLC; NAICS: 447110, 324110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629299023

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629299023?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Price Slide Means Credit Could Take a Slip; Cheap Oil Raises Possibility of More Defaults in U.S. Oil Sector

Author: Barley, Richard

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

Investors in mutual and exchange-traded funds may also pose a risk if they pull cash from the market in the wake of the sharp drop in oil; corporate bond liquidity is poor, potentially amplifying swings in prices.

Links: 360 Link to Full Text

Full text:

Oil normally acts as a lubricant. But feeding into the U.S. corporate bond market is instead causing some grinding of gears. Default risk is rearing its head.

That is a challenge for investors. Ultra-loose monetary policy has helped suppress defaults, as companies have had easy access to cheap refinancing. Global default rates hit 13.9% in 2009, but rapidly declined and have remained low since 2010: the 12-month trailing default rate in October was just 2.3%, with the one-year forecast at 2.4%, according to Moody's. Many investors have taken comfort from the idea that there has been little on the horizon to cause defaults to rise.

The decline in the oil price challenges that assumption, however. Energy bonds account for some 15% of Barclays' $1.3 trillion U.S. high-yield bond index, and are clearly pricing in higher default risk. In the second half of the year, : while the overall high-yield index is up 3.3% year-to-date, energy bonds are down 5.1%.

Within that, oil-field services companies' bonds have suffered the most, and are now yielding more than 10%. The spread between energy bonds and haven U.S. Treasurys has widened by 3.2 percentage points since June 30 to reach 6.5 percentage points, a massive move.

The key question is whether oil falls further from here, and for how long. West Texas Intermediate crude has already fallen 30% this year to around $68 a barrel. If the price fell to $65 a barrel, that could cause real worries: JPMorgan Chase calculates that the cumulative energy-sector default rate through 2017 could reach 40% if that price is sustained for that time and companies take no remedial action. Defaults would take time to pick up, with 2016 and 2017 more risky than 2015. The path of the oil price over the next year is vital, therefore, to medium-term default prospects.

That said, it doesn't take actual defaults to change market sentiment. The problems faced in the oil sector mark the first real fundamental blow to credit quality outside the financial sector in the past few years. Were another problem to emerge elsewhere, the market might start to reassess the default outlook more seriously. Investors in mutual and exchange-traded funds may also pose a risk if they pull cash from the market in the wake of the sharp drop in oil; corporate bond liquidity is poor, potentially amplifying swings in prices.

Ultimately, the sharp swings in energy bond prices are a reminder that monetary policy has its limits. The U.S. Federal Reserve can do a lot to ease corporate credit conditions, but it cannot deal with fundamental shocks to a sector or industry. Investors will need to drill deeper into company balance sheets if they want to avoid slip-ups.

Write to Richard Barley at

Credit: By Richard Barley

Subject: Bond markets; Default; Bond issues

Location: United States--US

Company / organization: Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629299172

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629299172?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Renewed Slide in Oil Price Hits Russian Ruble Again; Finance Minister Anton Siluanov Says Ruble Is Now Too Cheap

Author: Ostroukh, Andrey; Albanese, Chiara

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

"According to finance ministry estimates, the current [ruble] rate matches an oil price of substantially below $60 per barrel.

Links: 360 Link to Full Text

Full text:

The ruble suffered its second consecutive day of heavy losses on Tuesday, hitting a new record low when the dollar poked above 54 against the limping currency despite assurances from Russia's finance minister that the selloff has run too far.

The ruble sank to 54.11, dropping by about 5.5% on the day. The move mirrored the ruble's 6% drop Monday, the worst session since the 1998 financial crisis, with the currency hit by the recent slump in oil prices, which will pinch Russia's commodity-dependent budget.

There was no sign of intervention by the central bank to try and slow the tide Tuesday, but official dollar selling was reported by traders earlier in the week. The central bank does not comment on interventions and is set to publish data on Monday's activity early Wednesday.

"It is quite unnerving that the central bank does not comment on interventions. If they had said they intervened yesterday, the impact would have been bigger. The market has doubts that it was the central bank that intervened yesterday, which creates additional pressure on the ruble," said Sergei Romanchuk, chief trader at Metallinvestbank in Moscow.

Earlier Tuesday, Finance Minister Anton Siluanov told reporters that the ruble is undervalued.

"According to finance ministry estimates, the current [ruble] rate matches an oil price of substantially below $60 per barrel. With oil at $80 per barrel an equilibrium [dollar] rate will be below 45 rubles in 2015," Mr. Siluanov said.

Brent crude was recently trading at $71.64 per barrel, down 1.3% on the day.

The combined effect of lower oil prices, imposed against Russia are cranking up the pressure. "I find it hard to see the ruble going stronger without an attendant move up in oil prices," said Ivan Tchakarov, Russia economist at Citigroup.

Adding to the pressure, this month Russian banks and companies will have to pay back around $30 billion in foreign debt, increasing the domestic demand for dollars.

Furthermore, Russia's it now sees gross domestic product shrinking by 0.8% in 2015 compared with earlier expectations for recovery in economic growth to 1.2% from around 0.5% this year.

The gloomy forecast comes as Russia is on track to post its weakest growth this year since the global financial crisis.

Looking ahead, the market will be closely watching President Vladimir Putin's annual state of the nation address on Thursday for his assessment of the foreign exchange situation and the Ukraine crisis.

Still, analysts foresee a continuation in the currency slide. "Our base case scenario is that oil will likely bottom out at $60 a barrel, a level at which we believe the ruble fairly valued at 55 against the dollar," said BCS economist Vladimir Tikhomirov.

The ruble is the second worst performing currency this year, after Ukraine's hryvnia, having underperformed other oil currencies such as the Nigerian naira.

Ben Edwards contributed to this article.

Write to Andrey Ostroukh at and Chiara Albanese at

Credit: By Andrey Ostroukh and Chiara Albanese

Subject: Rubles; International finance; Central banks; Prices; Energy economics; Economic crisis; Currency; Economic growth; Gross Domestic Product--GDP

Location: Russia

People: Putin, Vladimir

Company / organization: Name: Citigroup Inc; NAICS: 551111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629315262

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629315262?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

U.S. Stocks Rise; Dow Ends at Record; Energy Shares Advance, as Oil Prices Resume Drop

Author: Scaggs, Alexandra

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

Beyond that, investors were buying shares of companies expected to withstand the oil-price drop, said Brian Fenske, head of sales trading at New York-based brokerage firm ITG. On Monday, stocks fell after weaker-than-expected reports on international manufacturing and disappointing Black Friday weekend retail sales in the U.S. Many investors have been surprised by the more-than-30% slide in oil prices this year, which accelerated after the Organization of the Petroleum Exporting Countries decided last week to maintain current output levels.

Links: 360 Link to Full Text

Full text:

A rise in energy shares helped propel the Dow Jones Industrial Average to a record high Tuesday, as oil prices resumed their decline.

The Dow gained 102.75 points, or 0.6%, to 17879.55. The average also hit a new intraday high of 17897.05 during the session. Its gains were broad, with 21 of 30 components higher. Chevron Corp. and Exxon Mobil were the best performers, contributing a total 27 points to the advance. Chevron gained $2.29, or 2.1%, to $114.02 and Exxon rose $1.84, or 2%, to $94.19.

The S&P 500 index gained 13.11 points, or 0.6%, to 2066.55, closing 0.3% below its all-time high.

The Nasdaq Composite Index rose 28.46 points, or 0.6%, to 4755.81.

The energy sector rebounded from recent steep losses and was the best performer in the S&P 500. Investors have been trying to determine the outlook for the sector, amid a slump in crude-oil prices. Even with Tuesday's 1.3% gain, the sector has lost 7% in the past month.

Traders said investors were unwinding bearish bets on the energy sector, which helped drive the stocks higher. Beyond that, investors were buying shares of companies expected to withstand the oil-price drop, said Brian Fenske, head of sales trading at New York-based brokerage firm ITG. Large-cap energy stocks, which are considered to be more insulated against oil-price volatility, outperformed their smaller brethren. Small-cap energy companies fell 0.4% Tuesday and are down 23% over the past month.

"A lot of people are wondering whether it's a buying opportunity," said Mr. Fenske. "You have to be cautious about it, but [the rise] is good to see."

European energy stocks also rose, fueling a 0.5% advance in the Stoxx Europe 600. The gains came as commodity prices continued to drop. Crude oil fell 3.1% to $66.88 a barrel, while Brent crude, the global benchmark, fell 2.8% to $70.54 a barrel. Gold futures declined 1.5% to settle at $1199.50 an ounce.

Broadly, traders said there was no specific news driving U.S. markets higher. Trading has been choppy in recent sessions. On Monday, stocks fell after weaker-than-expected reports on international manufacturing and disappointing Black Friday weekend retail sales in the U.S.

Many investors have been surprised by the more-than-30% slide in oil prices this year, which accelerated after the Organization of the Petroleum Exporting Countries decided last week to maintain current output levels. Lower oil prices have hit energy stocks across the globe and added downward pressure on already-low inflation in Europe.

Strategists say falling oil and gasoline prices should boost corporate earnings in the U.S., since they lead to lower costs for companies and more disposable income for consumers. But some investors are concerned about the impact of falling oil prices on areas that depend on the energy industry for economic growth.

"In theory, everybody agrees that lower gas prices are good...and I think that [idea] wins out," said Patrick Kaser, who manages more than $6 billion of large-cap stocks for Brandywine Global Investment Management. "But it's not as open-and-shut as it was when we were producing less oil."

In Asia, the Shanghai Composite Index jumped to close at its highest level since July 2011.

Treasury prices fell, pushing up the yield on the 10-year note to 2.285%.

In economic news, construction spending rose 1.1% in October, above forecasts for 0.6%. Labor-market data for November will come into focus later in the week, with Wednesday's release of private-sector employment and Friday's nonfarm-payrolls report.

In corporate news, Avanir Pharmaceuticals Inc. jumped $1.92, or 13%, to $16.92 after agreeing to be purchased by Japanese drug maker Otsuka Pharmaceutical Co. for $17 a share in cash. The at $3.5 billion and is expected to close in the first quarter of 2015.

Medical-device maker Medtronic Inc. gained 46 cents, or 0.6%, to $74.33 after completing the largest corporate-debt sale of the year on Monday, raising $17 billion. The debt sale will help the company to finance its acquisition of Ireland's Covidien PLC.

Write to Alexandra Scaggs at

Credit: By Alexandra Scaggs

Subject: Petroleum industry; Energy industry; Stock prices; Construction spending; Dow Jones averages; Large cap investments

Location: United States--US China Europe Asia

Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629338142

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629338142?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Nigeria's Tumbling Currency a Victim of Falling Oil Prices; Highly Oil Dependent Economy Feeling the Pinch

Author: McGroarty, Patrick; Hinshaw, Drew; Cox, Josie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]the current budget of nearly $30 billion is hardly $1 billion leaner than last year's, but the decline in oil prices has choked revenue. The 12-member Organization of the Petroleum Exporting Countries, who collectively pump more than a third of the world's oil, agreed last week to maintain a target of producing 30 million barrels a day.

Links: 360 Link to Full Text

Full text:

Nigeria's currency tumbled to a record low on Tuesday, hammered by falling oil prices that have weighed on Africa's top economy as it heads toward an election.

Nigeria overestimated oil prices this year by a wide margin--and is now suffering. Economists fear weak oil prices may prevent Africa's most populous nation from hitting the 7% growth the International Monetary Fund has forecast for this year.

"We're a substantial way from the economy even starting to think about being able to recover," said Nitesh Shah, an analyst at ETF Securities in London. "The government's options are limited."

Oil and natural gas make up almost all of Nigeria's exports and 80% of government revenue, according to the IMF.

As Brent crude prices have slipped 40% since June, to $68 a barrel, the wheels have begun to come off Nigeria's economy.

Nigeria, whose economy surpassed South Africa in April as the continent's largest, has striven to generate revenue beyond oil. Recent years saw promising growth in booming telecommunications, banks, hotels and other service businesses.

But to sustain that growth, businesses say they need bigger ports, more highways and fewer blackouts that crimp factory production and curb tax revenue. A weaker naira will make it more expensive to build that infrastructure.

The naira slumped to 186.9 to the U.S. dollar, traders said, extending a slide that has shaved more than 10% off its value this year.

Many African countries are paying the price for counting on one commodity to drive their economies. Growth has stalled in oil-rich Angola. Falling copper prices have dented growth in Zambia. Lower iron-ore prices were hurting Guinea, Liberia and Sierra Leone even before the Ebola epidemic made things far worse.

President Goodluck Jonathan, standing for re-election, has come under pressure to avoid unpopular spending cuts. As a result, the current budget of nearly $30 billion is hardly $1 billion leaner than last year's, but the decline in oil prices has choked revenue.

In October, Nigeria--which spends a fifth of its budget on its military--borrowed an additional $1 billion to buy helicopters, fighter jets and other equipment to combat Islamist militants. On Tuesday, the insurgency Boko Haram bombed a market in one city and raided police barracks in another.

In November, the government submitted a revised budget that proposes spending cuts based on a new average oil price of $73 a barrel. But even that price could be "overly optimistic," warned the central bank governor, Godwin Emefiele.

Nigeria isn't the only big oil producer with a wilting currency. Russia's ruble has shed nearly half of its value against the dollar since May. Norway's krone has dropped 17% since then, and the Canadian dollar is down 5%.

But Nigeria is particularly vulnerable. Unlike its peers, it didn't save while oil prices were high. A public fund that contained $20 billion in oil proceeds when crude prices first surged past $100 a barrel in 2008 had shrunk to $4 billion as of November.

"We get used to high oil prices and assume it's going to be there forever," said Ken Iwelumo, a former investment banker who now farms catfish in Nigeria.

Economists say oil prices could stay low for months. The 12-member Organization of the Petroleum Exporting Countries, who collectively pump more than a third of the world's oil, agreed last week to maintain a target of producing 30 million barrels a day.

Meanwhile, the country's power-privatization program has hit snags. Investors say they can't improve supply until the government invests $1.5 billion a year to replace a rusted-out grid of power lines.

Nigeria's All-Shares Index fell 1.8% on Tuesday, extending a drop of almost 18% this year.

In November, Nigeria's central bank tried to support the naira by limiting sales of the U.S. dollar. When the naira continued to drop, the central bank bought the Nigerian currency to pump up demand, traders say. The bank's foreign-exchange reserves shrank by $2 billion and the selloff continued.

Last week, the central bank raised its benchmark interest rate by one percentage point to a record 13%. It also lowered the naira's target trading band to around 168 against the dollar from 155 previously.

The naira is still trading outside that target. Fresh dollar sales by the central bank did little to stop its slide, traders say.

"Things are happening too quickly, too suddenly, too sharply for the average Nigerian or even analysts to process," said Bizmark Rewane, managing director of Lagos-based Financial Derivatives Co. "We do not know what will happen."

Write to Patrick McGroarty at , Drew Hinshaw at and Josie Cox at

Credit: By Patrick McGroarty, Drew Hinshaw and Josie Cox

Subject: Budgets; Petroleum industry; Crude oil prices; State elections

Location: Africa Nigeria

People: Jonathan, Goodluck

Company / organization: Name: ETF Securities Ltd; NAICS: 523920

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629396508

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629396508?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Ecuador to Top 2014 Oil Output Target, Official Says; Minister Expects Production 3% Above Initial Estimate

Author: Alvaro, Mercedes

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

According to the central bank, Ecuador's average oil output rose 7% to 555,000 barrels a day between January and September, from 520,000 barrels a day a year earlier.

Links: 360 Link to Full Text

Full text:

QUITO--Ecuador expects to surpass by about 3% its initial oil production target set for 2014, reaching an average of 560,000 barrels a day, a high-level government official said.

"Our goal for production in 2014 was an average of 545,000 barrels a day, but we will produce about 560,000 barrels a day," Minister of Non Renewable Natural Resources Pedro Merizalde said in an interview.

According to the central bank, Ecuador's average oil output rose 7% to 555,000 barrels a day between January and September, from 520,000 barrels a day a year earlier. State-run companies Petroamazonas and Rio Napo accounted for 76% of Ecuador's crude oil production in the period.

For next year, the Andean country expects to reach an output of 566,000 barrels a day, before jumping to about 700,000 barrels a day in 2019, when oil block 43, also known as ITT, will be producing oil.

Last year President Rafael Correa warned that the economy could collapse by 2020 if new oil reserves aren't discovered.

Mr. Merizalde said that with the support of Canada, Ecuador plans to conduct satellite exploration works in the southeast of the country to identify signs of oil or gas.

"During a six-month period, we will try to map evidence of oil or gas in 17 blocks and according to the results we could think of calling a new licensing round," said Mr. Merizalde.

Last year, Ecuador received just three bids in the country's 11th oil-licensing round, which was seeking private investments to explore about 2.6 million hectares in 13 concessions located in the southeastern Amazon region, near the border with Peru.

Mr. Merizalde said that the lack of interest from private companies was mainly due to the lack of information about the blocks, but analysts say the country doesn't offer conditions good enough to attract risk investment for the oil sector.

Write to Mercedes Alvaro at mercedes.alvaro@wsj.com

-0-

Credit: By Mercedes Alvaro

Subject: Petroleum industry; Petroleum production

Location: Ecuador

People: Correa, Rafael

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Languageof publication: English

Document type: News

ProQuest document ID: 1629450158

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450158?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Nearly 3,000 Canadian Railroad Cars No Longer Transport Oil, Chemicals; Canada's Transport Department Finds Cars Too Risky for Dangerous Goods After 2013 Derailment

Author: Vieira, Paul; George-Cosh, David

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

Nearly 3,000 Canadian railroad tank cars are no longer carrying after falling foul of the beefed-up safety regulations that followed last year's fatal derailment in Quebec.

Canada's Transport Department said 2,879 tank cars were deemed too risky to carry goods such as oil and chemicals in the country, according to documents presented in Parliament last week.

, Canada gave rail operators 30 days to stop using the least crash resistant types of DOT-111 tanks cars to transport such goods. Those DOT-111s still transporting dangerous goods have to be refitted with thicker steel and stronger reinforcements within a three-year period, or else be pulled off the rails.

The DOT-111 was the type of railcar carrying crude oil from North Dakota's Bakken region when in the Quebec town of Lac-Mégantic in July 2013, triggering an explosion and fire that killed 47 people.

The Canadian government said in April that around 5,000 higher-risk DOT-111s, which aren't reinforcement at their bottoms were operating in North America. Last week's documents indicate how many of these tank cars were carrying dangerous goods, such as highly-volatile crude oil, in Canada.

"The phase out is now complete," said the documents, prepared by the Transport Department.

In July, U.S. authorities proposed the phase out of older DOT-111s within a two-year period.

U.S. trade organizations, the Association of American Railroads and the American Short Line and Regional Railroad Association, have said there are 228,000 general-purpose DOT-111s in service in the U.S. The AAR has proposed a measure to remove 78,000 older tank cars that don't meet federal regulations to move hazardous materials.

The Canadian documents don't say who owned the higher-risk railcars or how many DOT-111s are still in service.

Canada's Transport Department didn't respond to requests for comment.

A representative for Canada's main railroad lobby, the Railway Association for Canada, said railroad customers own or lease most DOT-111s in service in North America, but didn't have specifics on the nearly 3,000 pulled from service. He added Canada's railroads have worked with officials in Ottawa to bolster rail safety.

An estimated 1.6 million barrels of crude oil a day are shipped via railroads in the U.S., or close to 20% of the total pumped in the country. Meanwhile, in Canada, the amount of crude moved by rail has quadrupled since 2012, and is forecast to more than triple between now and 2016.

On both sides of the border, government officials have moved to tighten safety regulations following the Lac-Mégantic disaster.

Canada's transportation-safety watchdog blamed the train operator's "weak safety culture" and a host of other factors for the accident. Its report also said the Canadian government failed to properly monitor rail-safety inspections at the regional level.

Write to Paul Vieira at and David George-Cosh at

Credit: By Paul Vieira and David George-Cosh

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629450265

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450265?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Venezuela Cuts Spending as Oil Prices Plummet; Maduro Says He Cut 'Unproductive' Spending Amid Inflation, Contracting Economy

Author: Vyas, Kejal

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

CARACAS--Venezuela, facing an economic crisis compounded by, is cutting spending and evaluating changes to its cumbersome foreign-exchange mechanism, which has long been a deterrent to investment, President Nicolás Maduro said Tuesday.

The executive said he authorized a 20% spending cut in expenses that he described as "unproductive" and not affecting the social programs that have kept his ruling Socialist party popular among Venezuela's many poor.

Resource-rich Venezuela is slated to be the outlier in the region this year, with its economy expected to contract by nearly 3%, as the country is roiled by an inflation rate topping 60% and a dollar crunch that has resulted in frequent shortages of imported food and consumer goods. The economic woes have gotten more worrisome for Mr. Maduro thanks to the more than 30% slide in oil prices since the summer.

The troubling outlook may push Venezuela's government to implement economic adjustments that had been expected all year but weren't delivered, analysts say.

"The government is so desperate that they are going to have to make reforms," said Russ Dallen, partner at brokerage Caracas Capital Markets. "They really have no choice."

The price of Venezuela's oil, which accounts for 96% of the country's dollar income, took a sharp plunge in recent days, falling nearly 7% from Friday to $63.40 as of Tuesday. The price of the oil basket is usually only published by the Oil Ministry at the end of each week, but Mr. Maduro offered early figures during an address transmitted on state television.

"We have a very complicated challenge here," Mr. Maduro told government ministers.

In a bid to improve economic growth, Mr. Maduro said his government is evaluating changes to its Sicad II dollar-distribution mechanism, but didn't offer details.

Venezuela has had rigid currency controls for more than a decade that make the government the only source of hard currency in the economy. The government earlier this year introduced Sicad II as a vehicle to boost the supply of dollars to individuals as well as foreign companies and importers. Sicad II sells greenbacks for around 50 bolívares per dollar, compared with the government's fixed rate of 6.3 bolívares, which is reserved for priority sectors like food and medicine.

But supply through Sicad II has fallen in recent months, sending the value of the bolívar plunging on the country's currency black market as locals look to shield their holdings from soaring inflation. One dollar fetched 157 bolívares in street transactions as of Tuesday, according to DolarToday.com, a website that tracks the parallel market.

"We're going to be delivering a blow to the parallel dollar, which does so much damage," Mr. Maduro said.

Venezuela Finance Minister Rodolfo Marco is in China this week seeking loans from the Asian country, which has already extended the South American nation nearly $50 billion in credit since 2007. Mr. Marco will next head to allied Iran and Russia also in search of financing, Mr. Maduro added.

Write to Kejal Vyas at

Credit: By Kejal Vyas

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629450344

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450344?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Dollar Rises on Higher Yields, Lower Oil and Fed Speakers; Gains Are Continuation of Larger Rally That Accelerated in the Third Quarter

Author: Ramage, James

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

The dollar resumed its ascent against the yen and the euro on Tuesday, fueled by rising short-term U.S. bond yields, falling oil prices and comments by voting members of the Federal Reserve's policy-setting committee regarding the timing of higher interest rates.

Links: 360 Link to Full Text

Full text:

The U.S. currency touched a seven-year high of 119.29 yen before settling 0.7% higher on the day at 119.24 yen. The euro fell 0.7% to $1.2381, its softest in a week and just above its lowest level since August 2012.

The gains represent a continuation of a larger rally in the dollar that accelerated over the third quarter as yield-hungry investors piled into the dollar on expectations that an improving U.S. economy would push the Fed to raise its benchmark interest rate before other central banks raise theirs.

Higher U.S. interest rates boost returns on dollar-denominated assets, making the dollar a more attractive investment.

On Tuesday, higher U.S. short-term bond yields made the two-year Treasury note more attractive to investors than lower-yielding equivalent German and Japanese government bonds and spurred buying in the dollar, said Ian Gordon, currency strategist at Bank of America Merrill Lynch.

U.S. yields rose as bond prices fell on profit-taking from last week's rally, as well as on positioning ahead of jobs data due later in the week. The move widened the gap between the two-year Treasury note, currently yielding 0.531%, and its German and Japanese counterparts, currently yielding 0.03% and 0.00%, respectively.

"The rise in two-year U.S. yields is creating a dollar-positive tone," Mr. Gordon said. "It suggests policy divergence between U.S. and its [developed-market] counterparts."

Lower oil prices helped the dollar too. The price of light, sweet crude in the U.S. fell 2% to $67.63 a barrel. Savings from cheaper oil helps U.S. consumers drive domestic economic growth, Mr. Gordon said, while economies around the world continue to sputter, making the dollar appear to be a better bet for investors.

In addition, recent comments from Federal Open Market Committee members gave the dollar a boost. Speeches by New York Fed chief William Dudley and Fed Vice-Chairman Stanley Fischer on Monday had a small immediate impact in the market, but resonated on Tuesday, Mr. Gordon said.

Mr. Dudley's language in particular focused more on the timing of interest-rate increases than on how falling commodity prices are affecting inflation expectations, said Richard Franulovich, senior currency strategist at Westpac Bank.

"It's a conversation that's more constructive for the dollar, whereas a conversation about missing inflation targets or lowering inflation expectations would be considered dovish," Mr. Franulovich said. "It doesn't mean it brings forward the timetable for rate hikes, but on the surface it brings investors to the dollar."

In another speech on Tuesday, Mr. Fischer said the Fed was moving closer to removing language stating that interest rates would remain lower for a considerable time, but added that any time frame for a rate increase would depend on future economic data. The market has interpreted omitting such language as hawkish in nature and as a sign the Fed is moving closer to a rate boost.

Most market participants expect the Fed to raise rates around September 2015. It would be the first rate increase since June 2006.

Investors appear loathe to make any large wagers that run counter to the prevailing strong-dollar trend before the European Central Bank's policy meeting on Thursday and the U.S. jobs report for November on Friday. Both are expected to provide direction for currencies.

Credit: By James Ramage

Subject: American dollar; Bond markets; Central banks; Treasury notes; Interest rates; Federal Reserve monetary policy; Currency; Crude oil prices

Location: United States--US

Company / organization: Name: Federal Open Market Committee--FOMC; NAICS: 921130; Name: Bank of America Merrill Lynch; NAICS: 522110, 551111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629450542

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450542?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Analysis: Oil-Price Drop Adds New Element to Middle East Tensions; Saudi Arabia and its Gulf Allies Can Stomach Low Prices Far Better Than Iran Can

Author: Trofimov, Yaroslav

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

Saudi Arabia, the largest producer within OPEC, was the main proponent of leaving production targets untouched, arguing that a reduction would be futile in raising prices, since any supply shortfall would be quickly made up by oil produced in OPEC nonmembers, such as the U.S. Iran, which is jostling with Saudi Arabia's allies in theaters from Yemen and Bahrain to Syria and Lebanon, pushed for the cut and criticized OPEC's decision.

Links: 360 Link to Full Text

Full text:

In a Middle East torn apart by the struggle between the Saudi-led Sunni conservative bloc and a rival alliance led by its Shiite nemesis Iran, the sudden rout in oil prices has just added a new ingredient to the volatile mix.

The decline that followed Thursday's decision by the Organization of the Petroleum Exporting Countries cartel not to cut production hit all of the Middle East's oil powers. While merely a nuisance for some, for others it is a harbinger of possible economic catastrophe.

Saudi Arabia and its fellow Gulf monarchies--Kuwait, the United Arab Emirates and Qatar--sit on giant rainy-day funds and can comfortably weather a few years of cheap oil, provided that prices stabilize not too far from current levels. Saudi strategic allies Egypt and Pakistan would likely benefit, as cheaper oil spurs their economies.

But for Iran, its economy already buffeted by international sanctions as the nuclear issue remains unresolved, the recent oil rout represents real pain that makes its regional ambitions much costlier.

"It seems that OPEC's Arab members do not mind the drop in the oil price--they see it part of the pressure exerted on Iran, which is involved in a cold war in the region, and in several conflicts in the area," said Riad Kahwaji, chief executive of the Institute for Near East and Gulf Military Analysis in Dubai. "If it wasn't deliberate, they do not mind."

To what extent this tilt in the region's balance of financial power will lead to policy changes is an open question. The Middle East isn't a part of the world where foreign-policy decisions are dictated by enlightened economic self-interest. Lower oil prices won't necessarily alter the behavior of regimes that perceive their very survival to be at stake.

A case in point is Iran's support for the Syrian regime of Bashar al-Assad, which is fighting against Islamic State and more moderate Sunni rebels backed by the West and the Gulf monarchies. That support continued unabated in 2011 and 2012, even as Iran's economy tanked under the impact of international sanctions imposed at the time. Other Iranian clients in the region--such as Hamas and the Islamic Jihad in Palestinian territories and Hezbollah in Lebanon--do not actually require large cash infusions from Tehran.

"We are locked in a dynamic that is not necessarily dictated by economics, but is mostly dictated by geopolitics," said Ali Vaez, Iran expert at the International Crisis Group think tank. "The principle that Iran is not going to allow its most important ally in the Arab world to collapse and create a circle of Sunni extremism in the middle of Lebanon and Iraq is a principle that is independent of the economic situation."

Somewhat alleviating the pressure on the Assad regime, Islamic State--which smuggles out oil from the fields it controls, often with the connivance of other rebels--is also going to see its income shrink. "Oil is just part of their revenues, but it is still part of their revenues," said Andreas Krieg, an expert at King's College London. "It would be even more difficult for them to sell oil to the Turks or the Kurds because, at those prices, they would be less willing to take the risk."

Across the border in Iraq, Islamic State's other main foe, the Shiite-led government in Baghdad, is also dependent on oil for most of its revenues. But even when oil was trading high, Iraq's army--weakened by endemic graft and low morale--collapsed in Mosul. Oil fluctuations won't make much of an immediate difference.

"Iraq is in a mess, and it doesn't matter whether they make less or more money because it is so infested with corruption," said Jamal Khashoggi, a Saudi political analyst and general manager of the newly established Al Arab News regional TV channel.

What cheap oil will do, however, is make it more palatable for countries across the region to cut costly fuel subsidies--and make life easier for those countries that have already done so. Fuel subsidies eat up a major chunk of the government budget in countries from Morocco to Jordan, and notably in Iran.

Egyptian President Abdel Fattah Al Sisi has just pushed through a series of such unpopular cuts--steps no previous Egyptian government dared to make--and is planning to do more. Cheaper oil makes those cuts politically less risky, bolstering Mr. Sisi just as he confronts an Islamist opposition that could have capitalized on socioeconomic unrest. "Egypt is a massive winner," says former hedge-fund manager Emad Mostaque, a strategist at Ecstrat consultancy in London.

And in Pakistan, where Prime Minister Nawaz Sharif moved to cut fuel subsidies last year, cheaper oil is already translating into lower prices at the pump. That is giving Mr. Sharif, who lived in Saudi exile after being ousted in a 1999 coup, a much-needed boost just as opposition politician Imran Khan is launching a new series of rallies that aim to unseat the government.

"It is a relief for Pakistan," said Sakib Sherani, a former government economic adviser who runs the Macro Economic Insights think tank in Islamabad. "And politically, it is a big benefit to the government."

Write to Yaroslav Trofimov at

Credit: By Yaroslav Trofimov

Subject: Petroleum industry; Crude oil prices; International

Location: Lebanon Iran Saudi Arabia Middle East

People: Assad, Bashar Al

Company / organization: Name: Hamas; NAICS: 813940; Name: Kings College-London England; NAICS: 611310

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newsp apers

Language of publication: English

Document type: News

ProQuest document ID: 1629450687

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450687?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Fits Texas Banks With a Five-Gallon Hat; In Lone Star State, Oil Slump Ripples Beyond Energy Companies

Author: Carney, John

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

Texas banks have been investor darlings for several years thanks to robust growth, a reputation for excellent management and exposure to one of the strongest economies in the U.S. Earlier this year, shares of some Texas banks were trading at more than four times book value--a multiple almost undreamed of for banks elsewhere in the U.S. Some of that Texas premium has evaporated following word last week that the Organization of the Petroleum Exporting Countries would keep up production levels despite crashing oil prices.

Links: 360 Link to Full Text

Full text:

It may not pay to mess with Texas anymore.

Some of that Texas premium has evaporated following word last week that the Organization of the Petroleum Exporting Countries would keep up production levels despite crashing oil prices. But given the risk of a prolonged oil-price slump--and the likely effects on the broader Texas economy--investors shouldn't be tempted by the large Texas banks.

Lower oil prices aren't likely to lead to the kind of catastrophic economic downturn that hit Texas in the late 1980s. The economy is much more diversified, with energy accounting for around 11% of the state's gross domestic product last year compared with nearly 20% in the 1980s.

But a prolonged downturn in the price of oil would almost certainly spread beyond the energy sector to sap business from the new hotels, restaurants, and retail businesses that have sprung up around the shale boom. Real-estate prices could also come under pressure.

Those ripples could hurt Texas banks, and not just those with outsize energy exposure. At Texas Capital Bancshares, for example, energy loans are just 6% of its $13.5 billion loan book. But with allowances for loan losses at just 0.72% of overall loans, the bank could face additional charges if the Texas economy deteriorates. What's more, around one-quarter of its loans are "market risk" real-estate loans on which repayment is expected to come from the sale or lease of the collateral--a particularly risky type of loan to hold in a downturn.

Even after a recent selloff, Texas Capital trades at 2.09 times tangible book value and 16.76 forward earnings. Those multiples aren't likely to hold if oil prices stay low for longer.

The Texas bank with the greatest direct energy exposure is Cullen/Frost Bankers; energy loans accounted for 14.9% of its total loan book as of Sept. 30. About 40% of those loans were linked to oil with the rest tied to natural gas. At the least, loan growth is set to slow as low oil prices depress production. Certainly, the 48% year-over-year growth for energy-linked loans seen in the third quarter is off the table.

If so, Cullen/Frost's current valuation of 2.27 times tangible book value looks vulnerable. That is especially the case since 62% of its assets are in low-yielding securities that investors likely assign no multiple at all.

Valuations of other big Texas banks with large bond portfolios, such as Prosperity Bancshares, at 2.98 times tangible book, and First Financial Bankshares, at 3.36 times, may also come under further pressure.

So long as oil stays low and valuations of Lone Star state banks stay high, investors should hold off before trying to lasso a bargain.

Write to John Carney at

Credit: By John Carney

Subject: Banking industry; Petroleum industry; Prices; Loans; Book value; Banks; Bond portfolios; Economic growth; Gross Domestic Product--GDP

Location: Texas

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629450766

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450766?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

The Upside of Europe's Ebbing Inflation; Declines in prices spurred by cheaper oil can help economies rebound.

Author: Heise, Michael

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]perhaps most important, ultralow interest rates discourage savings for retirement and slow down the growth of existing pension assets. [...]those eurozone countries that went through excessive price and cost increases before 2009 are in the process of correcting them.

Links: 360 Link to Full Text

Full text:

Such policies are not cost-free. They encourage risk taking among investors searching for yield, potentially leading to malinvestment. They affect the distribution of income and wealth between the less affluent, who are most affected by low returns on bank deposits, and the wealthier, who tend to benefit most from rising share prices. Finally, perhaps most important, ultralow interest rates discourage savings for retirement and slow down the growth of existing pension assets.

Second, those eurozone countries that went through excessive price and cost increases before 2009 are in the process of correcting them. Lower inflation or slight deflation in Greece, Ireland, Portugal and Spain are not a sign of damaging deflation. They are necessary to restore the purchasing power of people whose wages and incomes have declined and to improve these economies' competitiveness on international markets. Once these countries recover, downward price pressures will disappear.

Mr. Heise is chief economist of Allianz SE in Munich.

Credit: By Michael Heise

Subject: Inflation; Monetary policy; Central banks; Prices; Cost control; Eurozone

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629451737

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629451737?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Iraq Agrees on Kurdistan Oil Deal; Move Potentially Ends a Yearslong Political Impasse that Divided Iraq

Author: Bradley, Matt; Adnan, Ghassan

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.

ProQuest document link

Abstract:

Before Tuesday's deal, the Kurdish fighters had been financed and were mostly managed independently of Baghdad. [...]recently a deal seemed further away than ever.

Links: 360 Link to Full Text

Full text:

The Iraq government has agreed on an oil export deal with the semi-autonomous region of Kurdistan, according to Iraqi state television and a Kurdish lawmaker, potentially ending a yearslong political impasse that has divided the country.

Under the new agreement, which comes into effect on Jan. 1, Kurdistan will export 250,000 barrels of oil a day while the disputed province of Kirkuk will sell 300,000 barrels a day, said Abdel Qadr Mohammed, a Kurdish member of the Iraqi parliament's finance committee, who participated in the negotiations.

Both regions would export through Iraq's national oil company, the State Organization for Marketing of Oil, or SOMO. It marks a victory for Iraq's central government which has long sought to exercise more control over Kurdish oil exports and revenue.

Tuesday's compromise would also see the Kurdish region keep 17% of Iraq's budget expenditure, nearly a year after Baghdad halted payments to the region in retaliation for its of Baghdad on the global market.

Kurdish officials will also take a seat on SOMO's board, said Mr. Mohammed.

Tuesday's agreement is testament to the new national unity forged under Iraq's Prime Minister Haider al-Abadi, who took office in September following the eight-year rule of Nouri al-Maliki, whose leadership was marked by sectarian and ethnic discord, corruption and worsening security.

But the emerging resolution of Baghdad's oil dispute with Kurdistan also shows how the rise of Sunni insurgents from Islamic State has forced a fractured Iraq to resolve its differences.

In addition to taking a portion of Iraq's budget, the Iraqi defense ministry will give a direct monthly payment to Kurdish fighters, known as the Peshmerga, to train and arm them in their fight against Islamic State, said Kawa Mohammed Mawloud, a Kurdish member of the oil and gas committee in parliament.

Before Tuesday's deal, the Kurdish fighters had been financed and were mostly managed independently of Baghdad.

Until recently a deal seemed further away than ever. The dispute came to a head this year after Baghdad cut off budget payments to the Kurdistan Regional Government and the KRG began exporting large volumes of oil for the first time via a pipeline to Turkey. Efforts by U.S. diplomats to broker a deal fell apart amid an atmosphere of mutual distrust, with the two sides unable to agree on who should control how the oil would be marketed and how the revenue would be handled.

Shares in such as Genel Energy PLC and Gulf Keystone Petroleum Ltd. surged Tuesday on news of the deal and after the KRG made initial payments to some companies for oil exports. Kurdistan-focused oil stocks have languished this year as the political tensions with Baghdad left the KRG struggling to meet its payment obligations and the Islamic insurgency buffeting the country threatened operational security.

Though good news for Iraq, the deal is likely to add to the downward tailspin in the oil market, with the additional barrels expected from Kirkuk next year set to add to the already ample supply in the market.

When OPEC met in Vienna last week the group decided to , sparking a rout in the oil market. Iraq, the group's second-largest producer after Saudi Arabia, in particular made it clear it wouldn't consider reducing its oil output, which remains below levels reached in the 1970s before Saddam Hussein came to power.

Iraq's oil minister Adel Abdul-Mehdi told reporters in Vienna last week that Iraq is targeting production of around 3.8 million barrels a day next year, an increase of around 500,000 barrels a day compared with its production in October, according to the International Energy Agency. Under the terms of the deal with the KRG, exports via Ceyhan could increase by 250,000 barrels a day compared with November levels from January.

--Sarah Kent contributed to this article.

Write to Matt Bradley at

Credit: By Matt Bradley and Ghassan Adnan

Subject: Kurds; Petroleum industry; Budgets; Petroleum production

Location: Baghdad Iraq Kirkuk Iraq Iraq Kurdistan

People: al-Maliki, Nouri al-Abadi, Haider

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 2, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629546827

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629546827?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Corporate News: Jet Lessor's IPO Is Test in Cheap Oil Market

Author: Cameron, Doug

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Dec 2014: B.4.

ProQuest document link

Abstract:

Avic said Monday that it has dropped its offer after Avolon rejected its approach, echoing the abortive takeover last year by a Chinese consortium of Avolon's larger rival, International Lease Finance Corp. Airbus Group NV and Boeing Co. both have record order backlogs, and have played down the impact of falling fuel prices.

Links: 360 Link to Full Text

Full text:

Avolon Holdings Ltd. on Monday launched an initial public offering of stock that values the Irish aircraft-leasing company at $1.8 billion, in a test of investor appetite for stocks with exposure to declining oil prices.

The private-equity-controlled company priced its offer of 13.6 million shares at $21 to $23 a share ahead of a planned New York Stock Exchange listing under the ticker AVOL, according to a regulatory filing. An enterprise value of more than $6 billion would place Avolon among the top five publicly traded aircraft-leasing companies.

A 20% fall in the average global price of jet fuel over the past year has led to a surge in shares of airlines.

It also has stirred worries over a potential bubble in aircraft orders if carriers defer some of the record backlog of new fuel-efficient jets because of the drop in fuel prices.

Avolon is proceeding with its IPO after the collapse of takeover talks with a number of potential buyers in Asia, including Avic Capital Co. of China. Avic said Monday that it has dropped its offer after Avolon rejected its approach, echoing the abortive takeover last year by a Chinese consortium of Avolon's larger rival, International Lease Finance Corp.

Airbus Group NV and Boeing Co. both have record order backlogs, and have played down the impact of falling fuel prices. The jet makers and leasing companies maintain that airlines decide to buy new jets because of potential fuel and other efficiency savings garnered over many years, and don't react to short-term changes in oil prices. Executives have said requests for order cancellations and deferrals are running below their historical average.

However, investors have pulled back from some lessors in recent months, while airline stocks have soared. AerCap Holdings NV, the world's largest jet lessor, which bought control of ILFC, is up 16% this year, but has lost 6.6% over the past three months. Air Lease Corp., the second-largest listed lessor, has climbed 22% in 2014. Like rival Aircastle Ltd., Air Lease has outperformed the S&P 500 this year and over the past quarter.

Avolon owns a fleet of 122 mainly narrowbody aircraft with a book value of $5.3 billion and manages 12 more for other investors leased to 48 airlines. It has a $6.6 billion order book for 74 jets, including Boeing 787s, and intends to purchase A330neos from Airbus.

Avolon was launched in May 2010 with private-equity backing by a group of former Royal Bank of Scotland PLC executives. Its largest shareholders are Cinven Partners LLP, CVC Capital Partners, Oak Hill Capital Partners and an affiliate of the Government of Singapore Investment Corp.

Credit: By Doug Cameron

Subject: Leasing companies; Airlines; Stock prices; Investments; Private equity; Crude oil prices; Initial public offerings

Company / organization: Name: Aircastle Ltd; NAICS: 532411; Name: CVC Capital Partners Ltd; NAICS: 523910; Name: Government of Singapore Investment Corp Pte Ltd; NAICS: 525990; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Royal Bank of Scotland PLC; NAICS: 522110; Name: AerCap Holdings NV; NAICS: 523110; Name: Boeing Co; NAICS: 336411, 336413, 336414; Name: Airbus Group NV; NAICS: 336411, 336412, 336413; Name: Avolon Aerospace Leasing Ltd; NAICS: 532411

Classification: 3100: Capital & debt management; 8350: Transportation & travel industry; 9175: Western Europe

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.4

Publication year: 2014

Publication date: Dec 2, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629999538

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docvie w/1629999538?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Who's Afraid of Cheap Oil? The Saudis know they cannot kill U.S. shale output, even if the news media don't.

Author: Jenkins, Holman W; Jr.

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.

ProQuest document link

Abstract:

For one thing, America's shale companies are much quicker and more flexible in slashing costs and sponsoring innovations in response to a falling oil price than are the state-owned oil companies of OPEC. [...]shale wells tend to be short-lived and much of their production is front-loaded.

Links: 360 Link to Full Text

Full text:

Saudi versus shale? That's been the theme of countless stories on the business wires in recent months. The case is overstated. The Saudis aren't stupid. They can't kill America's shale revolution and it's pointless to try.

Yes, there will be (figurative) blood, even bankruptcies, if oil tumbles into the $60-per-barrel range for a while. But pain for a few individual overextended companies will be opportunities for others. For one thing, America's shale companies are much quicker and more flexible in slashing costs and sponsoring innovations in response to a falling oil price than are the state-owned oil companies of OPEC.

Secondly, shale wells tend to be short-lived and much of their production is front-loaded. That means investors face less uncertainty in relation to costs and revenues than do traditional drillers, and can more easily lock in a price for their eventual output before they start drilling.

As well, much of the shale revolution in the U.S. was founded on natural gas. Natural-gas prices have been back up above $4 for most of the year. Lately gas prices have been erratic as expectations for the winter heating season bounce around but natural gas still remains all but unlinked from now-falling oil.

Big new chemical plants are being built in the U.S. by American, European and South American investors to consume our homemade feedstock. Liquefied-gas exports are a rising opportunity for U.S. producers and unaffected by the price of oil. Germany and Japan are reducing their reliance on nuclear and coal, as are China and India. Europeans are trying to reduce their reliance on Russian gas.

All these factors are likely to sustain the U.S. energy revolution in the long run even as domestic entrepreneurs adjust to a lower oil price. If new drilling slows up in the short term, as it likely will, the shale resources will remain in the ground until higher prices justify renewed investment.

Oil prices took a big dip late last week after an OPEC meeting in which the overrated cartel failed to cut output. Whether anyone should have expected a cut is arguable, but since there was a meeting the possibility necessarily had to be priced into the market. When a cut didn't materialize, prices dropped below $70 for West Texas Intermediate for the first time in five years.

Of course, when we talk about an OPEC cut, we really mean a Saudi cut, since other members are neither disciplined enough nor influential enough in markets to find it worth risking their own revenues in a common effort to prop up prices.

The Saudis have played this role previously but they understand now that the shale revolution has diminished their sway and greatly increased the cost of any effort to divert prices from their natural market-clearing path for any length of time.

The Saudis learned long ago that a strong price for their chief export comes from strong growth of the world economy, sadly lacking today. A failed global recovery is the deeper reason for the collapse in oil prices from $110 barely five months ago. Yet despite much confused rhetoric out of Japan about how a lower oil price undermines the government's battle against deflation, nothing benefits Japan like lower oil prices. Japan imports most of its energy. One of Japan's biggest exports is cars, which more consumers can afford to own and operate at a lower price of oil.

A lower price can only do so much, of course, to pull Japan and Europe out of their sloughs, since so much of their domestic retail price of gasoline consists of taxes. But a lower oil price doesn't hurt.

Understandably arousing suspicion in the U.S. oil patch was a sudden shift in Saudi behavior in recent weeks, from discounting to protect its Asian market share to discounting to win more business from domestic U.S. refiners. Even here the signal may be more about underlining Riyadh's strategic alignment with the U.S. despite skepticism about the Obama administration, especially as a Republican Congress begins to make itself felt.

Saudi Arabia cares about Saudi Arabia, and its biggest strategic challenge now isn't coping with $70 oil but meeting the geopolitical unraveling of the Middle East. No matter who the U.S. president is, only America can deploy military power to make a meaningful difference. And unlike local powers, America is deemed relatively disinterested. In not fighting the oil market, these are the considerations that matter to the Saudi leadership right now.

Cheaper oil benefits the U.S. economy, U.S. animal spirits and U.S. confidence and willingness to lead. It undermines Iran and Russia. Upping U.S.-bound exports via the Red Sea also underlines Saudi Arabia's ability to bypass the Strait of Hormuz, an oil-shipment chokepoint vulnerable to Iranian military action.

Bottom line: America's hunt for a dark cloud behind the silver lining of lower oil prices is overdone.

Credit: By Holman W. Jenkins, Jr.

Subject: Petroleum industry; Natural gas reserves; Meetings; Natural gas; Crude oil prices

Location: United States--US Japan

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 3, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629460111

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629460111?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Venezuela Cuts Spending as Oil Prices Plummet; Maduro Says He Cut 'Unproductive' Spending Amid Inflation, Contracting Economy

Author: Vyas, Kejal; Baer, Justin

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

CARACAS, Venezuela--President Nicolás Maduro, struggling with an economic crisis compounded by falling oil prices, said Tuesday he authorized a 20% cut in government spending and plans to modify the country's complicated foreign-exchange system, opening the door to a possible devaluation.

The moves could shore up the country's fragile finances but are also likely to deepen an economic downturn and pose a major political risk to Mr. Maduro, whose predecessor Hugo Chávez built a successful political machine based on government spending for the poor.

The price of Venezuela's oil, which accounts for 96% of the country's dollar income, plunged in recent days, falling nearly 7% from Friday to $63.40 as of Tuesday.

In a country that was already spending beyond its means for the past several years, the falling oil price stands to worsen the country's finances. Venezuela's fiscal deficit--the difference between what it spends and earns--stands at about 17% of annual economic output, a level economists say is unsustainable.

"We have a very complicated challenge here," Mr. Maduro told government ministers in a televised address on Tuesday. He said the government only planned to cut "unproductive" expenses and wouldn't affect social spending.

Underscoring the challenge facing Mr. Maduro, his popularity sank to a new low of 24.5% in November, down 5.7 percentage points from September, according to a poll by respected local pollster Datanalisis on Tuesday. Nearly 86% of the 1,293 homes surveyed said the country was headed in the wrong direction.

Venezuela's economy is expected to contract by 3% this year, with an inflation rate topping 60% and a dollar crunch that has created frequent shortages of imported food and consumer goods. The falling price of oil sets the stage for worse to come.

"The government is so desperate that they are going to have to make reforms," said Russ Dallen, partner at brokerage Caracas Capital Markets. "They really have no choice."

Analysts say Mr. Maduro is walking a tightrope in trying to maintain the populist policies of Mr. Chávez while trying to confront the reality of Venezuela's economic problems. This past summer, Mr. Maduro publicly discussed measures to raise income like raising the country's virtually free price of gasoline but later backtracked.

Foreign Minister Rafael Ramírez said last month that Venezuela would continue its generous PetroCaribe program in which more than a dozen allies in the region receive Venezuelan crude at preferential terms and can pay for it over 20 years.

But behind the scenes, Venezuelan officials have held talks with some members like the Dominican Republic and its investment bank, Goldman Sachs Group Inc., on a deal that would give Venezuela cash in exchange for retiring debt, people familiar with the matter said.

Under the proposed structure the governments discussed, Goldman would acquire the Dominican debt from Venezuela at a steep discount, one of the people said. The Dominican Republic would in turn sell bonds, using the proceeds to retire the debt now held by Goldman, the person said.

The person said an agreement hadn't been reached, and a deal wasn't imminent.

Jamaica, another Venezuela borrower advised by Goldman, has also considered a similar arrangement, the person said.

In the face of the economic turmoil, Mr. Maduro said his government is evaluating changes to the foreign exchange system, but didn't offer details.

Venezuela has had rigid currency controls for more than a decade. The government has at least three official exchange rates, including one pegged at 6.3 bolivares to the dollar. But on the black market, one dollar fetched 157 bolívares in street transactions as of Tuesday, according to DolarToday.com, a website that tracks the parallel market.

Mr. Maduro pledged to make changes that would create more access to dollars through official means.

"We're going to be delivering a blow to the parallel dollar, which does so much damage," Mr. Maduro said.

Write to Kejal Vyas at and Justin Baer at

Credit: By Kejal Vyas And Justin Baer

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 3, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629462180

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629462180?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

World News: Russia Sees Sanctions Leading to Recession --- Economy Ministry Expects West's Punitive Measures Still in Force by 2016, Compounding Damage From Falling Oil Prices

Author: Ostroukh, Andrey

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Dec 2014: A.11.

ProQuest document link

Abstract:

Though the worst performance in several years, that would be far less wrenching than Russia's last recession in 2009, when the global financial crisis triggered a contraction of 9%, driving unemployment up to 8.4% and forcing the Kremlin to spend tens of billions of dollars to steady the economy.

Links: 360 Link to Full Text

Full text:

MOSCOW -- Russia's Economy Ministry warned that the country will slip into recession next year and the ruble will remain weak, in the government's strongest admission yet of the depth of the damage wrought by the drop in oil prices and Western sanctions.

While many economists have been warning of a contraction for weeks, the government had stuck to its forecast for slow growth next year. But the sharp drop in oil prices -- which knocked the ruble to a record low of 54 rubles to the dollar on Tuesday -- has dashed remaining hopes.

The latest forecast drew quick criticism from the Finance Ministry, which called it too gloomy and said it could be revised. A few hours after being published, the report disappeared from the Economy Ministry's website in a move a spokesman called technical.

The Economy Ministry said it sees gross domestic product shrinking by 0.8% in 2015 compared with earlier expectations for a recovery in growth to 1.2%, from around 0.5% this year. A month ago the central bank predicted zero growth next year. A contraction in GDP would be Russia's first since 2009.

The ministry also said it now expects the Western sanctions to still be in place by 2016, reflecting the hard line being repeated by leaders in Europe.

German Chancellor Angela Merkel has said Moscow was far from having economic sanctions eased or lifted -- a tough stance she reiterated last week during a parliamentary debate in Berlin, where she accused Russia of calling Europe's peaceful, postwar order into question. In September, she said that it may even be necessary to reconsider energy cooperation with Russia.

Slovakia's Prime Minister Robert Fico said that clashes between Ukrainian government forces and pro-Russia separatists may still expand into a broader war and that Europe should push forcefully for peace talks.

Russia has largely shrugged off the penalties imposed in the wake of its annexation of Ukraine's Crimea region and its alleged support of rebels in that country's east. The Kremlin denies aiding the rebels.

But the ruble is down nearly 40% year-to-date following the recent dive in the price of oil below $70 a barrel from more than $100 in the summer. Oil and gas exports are Russia's main source of foreign-currency revenues.

"We changed our forecast from growth to recession about two months ago due to negative dynamics in investment and declining oil prices," said Vladimir Osakovsky, chief economist at the Bank of America Merrill Lynch in Moscow.

Public-opinion polls suggest the slowdown isn't likely to cause much political difficulty for President Vladimir Putin, especially given the Kremlin's tight control over the political arena. Few observers see the economic troubles becoming so severe that they could pose a real challenge to Mr. Putin's tight grip on the political system, barring sweeping additional sanctions or a sustained deeper decline in oil prices.

Surveys show inflation is reported as Russians' most pressing concern, but few voice criticism of the government's foreign policy.

Unless the oil price falls substantially further, many forecasters expect any recession in Russia next year to be relatively mild, with a contraction of about 1%. Though the worst performance in several years, that would be far less wrenching than Russia's last recession in 2009, when the global financial crisis triggered a contraction of 9%, driving unemployment up to 8.4% and forcing the Kremlin to spend tens of billions of dollars to steady the economy.

By contrast, the government's latest forecast calls for the jobless rate to rise from the 5.5% expected this year to 6.4% in 2015. Real disposable incomes are seen dropping 2.8% next year, after rising only 0.6% in 2014.

The Economy Ministry lowered an average 2015 oil price forecast to $80 a barrel from $100 a barrel. Such a revision is expected to keep an average ruble rate in 2015 at 49 per dollar compared with earlier expectation of 37.7. The real effective ruble rate is expected to weaken by 13.5% next year.

The Finance Ministry said that the Economy Ministry is exaggerating downside risks to the ruble. Finance Minister Anton Siluanov said the dollar will be trading below 45 rubles next year if oil prices average $80 a barrel.

Credit: By Andrey Ostroukh

Subject: Recessions; Crude oil prices; Economic development; Economic growth; Gross Domestic Product--GDP; Economic conditions -- Russia; Sanctions

Location: Russia Europe

People: Fico, Robert Merkel, Angela

Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: Ministry of Economic Development-Russia; NAICS: 926110

Classification: 1110: Economic conditions & forecasts; 1300: International trade & foreign investment; 8510: Petroleum industry; 9176: Eastern Europe

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.11

Publication year: 2014

Publication date: Dec 3, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629510930

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629510930?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Crude Loses Grip On Gains as Pact Augurs More Oil

Author: Berthelsen, Christian

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Dec 2014: C.4.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Oil prices erased much of Monday's gains as an agreement between Iraq and the Kurdish regional government portends more supplies for a global market already brimming with crude.

Andrew Lebow, a trader for investment bank Jefferies, said the oil market appeared to give credence to the agreement.

"The market may be taking this one more seriously than others," Mr. Lebow said. "This could result in more supply on the market, which is the last thing we need."

Meanwhile, traders appeared eager to take profits from Monday's run-up, when U.S. oil prices gained 4.3% in the absence of any bullish fundamental developments in the market.

Tuesday's selloff carried over into other oil-related markets, with gasoline for January delivery falling 6.94 cents, or 3.7%, to $1.8116 a gallon, the lowest settlement in more than five years.

January diesel settled at its lowest level in more than four years, losing 5.8 cents, or 2.6%, to close at $2.1544 a gallon.

---

Matt Bradley and Ghassan Adnan contributed to this article.

Credit: By Christian Berthelsen

Subject: Kurds; Petroleum industry; Agreements; Petroleum production; Crude oil; Commodity prices

Location: United States--US Iraq

Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: New York Mercantile Exchange; NAICS: 523210

Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.4

Publication year: 2014

Publication date: Dec 3, 2014

column: Commodities Report

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 009 99660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629510994

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629510994?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Dow Hits Record as Energy Stocks Bounce --- Chevron, Exxon Mobil Lead Blue Chips Higher as Investors Reverse Bearish Bets and Chase Bargains After Sector's Tumble

Author: Scaggs, Alexandra

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Dec 2014: C.10.

ProQuest document link

Abstract:

The Dow Jones Industrial Average climbed to a record as investors drove up shares of big energy companies seen capable of weathering the significant decline in oil prices.

Links: 360 Link to Full Text

Full text:

The Dow Jones Industrial Average climbed to a record as investors drove up shares of big energy companies seen capable of weathering the significant decline in oil prices.

The Dow gained 102.75 points, or 0.6%, to 17879.55, hitting its 32nd record high this year. Chevron and Exxon Mobil were the best performers among the blue chips, contributing a total of 27 points to the advance. Chevron gained $2.29, or 2.1%, to $114.02. Exxon rose 1.84, or 2%, to 94.19.

The S&P 500 index gained 13.11 points, or 0.6%, to 2066.55, closing 0.3% below its record. The Nasdaq Composite Index rose 28.46 points, or 0.6%, to 4755.81.

Energy stocks were the best-performing sector in the S&P 500, gaining 1.3% despite a renewed fall in energy prices.

Crude-oil futures fell 3.1% to $66.88 a barrel, while Brent crude, the global benchmark, fell 2.8% to $70.54 a barrel.

Traders said the bounce in energy stocks came as some investors bought shares to reverse bearish bets.

Other investors hunted among beaten-down names, focusing on companies with broad business lines and healthier balance sheets. Even with Tuesday's uptick, energy stocks in the S&P are down 7% over the past month.

"A lot of people are wondering whether it is a buying opportunity," Brian Fenske, head of sales trading at New York-based brokerage firm ITG. "You have to be cautious about it, but [the rise] is good to see."

Small-cap energy companies in the S&P 600, many of which have less-diversified businesses and more debt, fell 0.4%. They have lost 23% over the past month.

European energy stocks also rose, fueling a 0.5% advance in the Stoxx Europe 600.

Falling oil and gasoline prices are seen by many analysts as boosting corporate earnings by lowering costs and allowing for more disposable income among consumers.

But some investors are concerned that falling oil prices could lead to slower investment and growth in the energy industry, which has been an important engine of growth for the broader economy.

Patrick Kaser, who manages more than $6 billion of large-cap stocks for Brandywine Global Investment Management, still thinks the drop in oil will be good for U.S. stocks. But he will be watching for signs that energy companies are laying off workers.

"In theory, everybody agrees that lower gas prices are good . . . and I think that [idea] wins out," Mr. Kaser said. "But it's not as open-and-shut as it was when we were producing less oil."

Consumer-discretionary stocks in the S&P 500 gained 0.4%, but still lagged behind the broader market. They fell 1.1% Monday, after news of disappointing sales over the Black Friday weekend, the unofficial kickoff of the holiday shopping season. Retailer Coach Inc. was the biggest decliner in the group, falling 91 cents, or 2.5%, to 35.19.

Treasury prices fell, pushing up the yield on the 10-year note to 2.285%.

Gold futures declined 1.5% to settle at $1,199.20 an ounce.

In corporate news, Avanir Pharmaceuticals Inc. jumped 1.92, or 12.8%, to 16.92 after agreeing to be purchased by Japanese drug maker Otsuka Pharmaceutical Co. for $17 a share. The deal values California-based Avanir at $3.5 billion and is expected to close in the first quarter of 2015.

In other deal news, Cypress Semiconductor agreed to buy memory-chip maker Spansion. Spansion shares soared 5.01, or 21.9%, to 27.86.

Overseas early Wednesday, the Shanghai Composite Index was up 1.5% after after a measure of Chinese nonmanufacturing activity improved. The Shanghai benchmark has had a nearly uninterrupted string of 1% plus daily gains since Nov. 21, when China's central bank announced a surprise rate cut. Japan's Nikkei Stock Average was up 1.1%, while Australia's S&P/ASX 200 was up 0.4%.

Credit: By Alexandra Scaggs

Subject: Stock prices; Dow Jones averages; Daily markets (wsj)

Company / organization: Name: Coach Inc; NAICS: 316992, 316998; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Chevron Corp; NAICS: 211111, 324110

Classification: 3400: Investment analysis & personal finance; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.10

Publication year: 2014

Publication date: Dec 3, 2014

column: Tuesday's Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629511009

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629511009?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Brent Crude Slips as OPEC Supply Cut Looks Unlikely; Global Crude-Oil Supplies Remain Ample

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.

ProQuest document link

Abstract:

Oil prices have slumped for months on concerns about a world-wide glut of oil, as supply growth has outpaced demand and global inventories have piled up.

Links: 360 Link to Full Text

Full text:

Brent crude futures fell to a multiyear low Wednesday on indications that global supplies would remain ample as the Organization of the Petroleum Exporting Countries maintains its production levels.

Meanwhile, U.S. oil futures rose after weekly inventory data showed an unexpected decline in domestic stockpiles.

Prices have slumped for months on concerns about a world-wide glut of oil, as supply growth has outpaced demand and global inventories have piled up. Prices fell to multiyear lows last week after OPEC decided to maintain its current production quota. Following last week's OPEC meeting, some analysts said the cartel would likely agree to cuts in early 2015.

But even if oil prices fall further. OPEC's top producer believes oil prices could stabilize around $60 a barrel, a level that it and other Gulf producers believe they could withstand.

Wednesday's report about Saudi Arabia's plans is "just another factor that solidifies the bearish outlook," said Kyle Cooper, managing partner of research consultancy IAF Advisors in Houston. The Saudis "have seen their market share be continually diminished, especially in the U.S., and I think they've grown weary of it. They're going to defend their market share a little more than the mind-set had been a few months ago."

Brent, the global benchmark, fell 62 cents, or 0.9%, to $69.92 a barrel on ICE Futures Europe, the lowest settlement since May 25, 2010.

Light, sweet crude for January delivery settled up 50 cents, or 0.8%, at $67.38 a barrel on the New York Mercantile Exchange.

U.S. crude supplies fell by 3.7 million barrels in the week ended Nov. 28, the U.S. Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal expected stocks to rise by 600,000 barrels.

Gasoline stockpiles rose by 2.1 million barrels. Analysts had predicted stockpiles would rise by 800,000 barrels.

Gasoline distributors likely delayed buying more supplies from last week to this week because they expected that prices could fall further after last week's OPEC meeting, said Andy Lipow, president of Lipow Oil Associates in Houston.

"If you know something's going on sale Monday...you'd wait if you could," Mr. Lipow said.

Distillate stocks, which include heating oil and diesel fuel, rose by three million barrels. Analysts had expected a 300,000-barrel weekly decrease.

"The product builds overall outweighed the crude-oil draw," said Tony Headrick, energy analyst at CHS Hedging LLC. "The market still feels heavy."

January reformulated gasoline blendstock, or RBOB, fell 0.46 cent, or 0.3%, to $1.8070 a gallon, the lowest settlement since Oct. 12, 2009.

January diesel slid 2.1 cents, or 1%, to $2.1334 a gallon, the lowest settlement since Sept. 28, 2010.

Christian Berthelsen, Summer Said, Sarah Kent and Benoît Faucon contributed to this article.

Write to Nicole Friedman at

Credit: By Nicole Friedman

Subject: Petroleum industry; Supply & demand; Inventory; Crude oil prices

Location: United States--US

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 3, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629564421

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629564421?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Talking Turkey on Russia's Energy Woes; Oil Price Changing Fortunes Among Emerging-Market Countries

Author: Barley, Richard

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.

ProQuest document link

Abstract:

Investors were concerned about the country's current-account deficit and the unorthodox approach of the Central Bank of Turkey to interest-rate policy, as well as political risk.

Links: 360 Link to Full Text

Full text:

Energy united Russia and Turkey this week, as Moscow scrapped a planned natural-gas pipeline to the European Union in favor of . But the price of energy--and oil in particular--is driving the two countries' outlooks apart.

The Russian ruble has tracked oil closely this year, and is now down 38% against the U.S. dollar. The scale of the move is , which has essentially allowed the ruble to float, as it will push inflation higher from an already elevated level of 8.3% and potentially poses systemic risks. The central bank might be thinking of raising rates--but it has already put them up by four percentage points this year to 9.5%. The Russian Economy Ministry Tuesday warned of a .

Just a year ago, however, it was the Turkish lira under fire in the foreign-exchange market. Investors were concerned about the country's current-account deficit and the unorthodox approach of the Central Bank of Turkey to interest-rate policy, as well as political risk. But after a bout of turbulence in January, the lira has had a relatively smooth ride against the dollar, and is down just 4% year-to-date.

Lower oil prices are a boon for the Turkish economy: it is a big energy importer, to the tune of some $55 billion a year, or 6.5% of GDP, according to Standard Bank. Falling oil should deliver benefits for both the current account and for inflation. That might even allow the central bank room to cut rates as Turkey continues to pursue strong growth. Investors are becoming more enthusiastic about Turkey's prospects.

Exchange rates aren't the only sign of divergence. The annual cost of insuring $10 million of Turkish government debt against default for five years has fallen more than a third this year to $155,000, while for Russia it has more than doubled to $355,000.

Russia's problems seem unlikely to go away soon. But investors should be wary of assuming Turkey is set fair purely as a result of an oil windfall. The country still needs to carry out reform; if lower oil prices allow the government to dodge hard decisions after next year's elections, that would be a worrying sign.

Turkey needs to use the benefit of lower oil prices to ensure that it doesn't end up in the hot seat again.

Write to Richard Barley at

Credit: By Richard Barley

Subject: Prices; Political risk; Central banks; Petroleum industry; American dollar

Location: Turkey Russia United States--US

Company / organization: Name: European Union; NAICS: 926110, 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 3, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629564426

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629564426?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Bank of Canada Stands Pat, Says Oil Prices Pose Risk; Stronger U.S. Growth Seen Bolstering Exports

Author: Menon, Nirmala

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.

ProQuest document link

Abstract:

"Overall, the balance of risks remains within the zone for which the current stance of monetary policy is appropriate," the central bank said in its final interest rate decision of 2014, largely maintaining language used in the October policy statement.

Links: 360 Link to Full Text

Full text:

OTTAWA--Canada's central bank held its key interest rate at 1% on Wednesday and said it is seeing signs of a broadening recovery in the Canadian economy, but cautioned about headwinds from .

The Bank of Canada said weaker oil prices pose an "important downside risk" to inflation, though the impact will be tempered by stronger U.S. growth, a weaker Canadian dollar and new federal fiscal measures such as increased infrastructure spending and tax breaks.

With the central bank pinning its hopes and business investment taking over from debt-ridden consumers to drive growth in Canada, its assessment of the U.S. economy is important, since some 75% of Canadian exports head south of the border. The bank acknowledged this long-awaited rotation may now be under way, though declining commodity prices will weigh on the economy.

The central bank said the output gap--the difference between actual and potential growth--appears smaller than predicted in October, but that the labor market continues to show significant economic slack.

After some volatile trading immediately after the statement, the Canadian dollar edged higher, pushing the U.S. dollar to C$1.1355 area from C$1.1407 late Tuesday.

The Bank of Canada's tone is slightly less dovish than in October, said Benjamin Reitzes, senior economist at BMO Capital Markets, but "they're clearly on hold for quite some time."

"They're cognizant of downside risks from oil prices, but at this point, they think there is enough momentum for the economy to stay on the positive track it's on," Mr. Reitzes said.

The overnight rate has remained at 1% now for more than four years, since September 2010, marking the longest period of no change to the policy rate since the 1950s.

The central bank acknowledged inflation has been stronger than it had predicted, but said higher consumer prices over the past year are largely due to the temporary effects of a weaker Canadian dollar and sector-specific factors, such as higher meat and telecommunication costs.

Canadian inflation has been one among developed economies in recent months, exceeding the 2% the Bank of Canada targets when setting interest rates.

The central bank said underlying inflation has edged up, but remains below 2%. In October, it described underlying inflationary pressures as being muted due to economic slack and stiff retail-sector competition.

The Bank of Canada signaled greater concern about household imbalances--code for lofty house prices and high household debt--saying it presents significant risk to financial stability, which suggests rate cuts aren't in the cards. In October, it said risks associated with household imbalances were edging higher.

"There was little chance [of rate cuts] in the first place, and there is even less now," Mr. Reitzes said.

Write to Nirmala Menon at

Credit: By Nirmala Menon

Subject: Central banks; Canadian dollar; Monetary policy; Interest rates

Location: United States--US Canada

Company / organization: Name: Bank of Canada; NAICS: 521110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 3, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629663469

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629663469?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Malaysia's Petronas Delays Decision on Canadian Gas-Export Terminal; Company Cites High Development Costs, Falling Oil Prices

Author: Dawson, Chester

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.

ProQuest document link

Abstract:

CALGARY--Malaysian state-owned energy company Petronas on Wednesday said it would delay making a final investment decision on building a multibillion-dollar natural gas export plant on Canada's Pacific coast, citing high development costs and a recent slump in oil prices.

Links: 360 Link to Full Text

Full text:

The move represents a setback for the project and the government of British Columbia, which has looked to revitalize its remote northern coast by establishing an industry to ship liquefied natural gas to Asia. It also raises questions about Canada's viability as a hub for exporting surplus natural gas from North America.

Petroliam Nasional Bhd., or Petronas, had set a year-end deadline; but following meetings on Monday between CEO Shamsul Azhar Abbas and British Columbian government officials, the company said it would defer a decision on the 36 billion Canadian dollar ($31.7 billion) facility to cool and compress gas for transport overseas.

"Costs associated with the pipeline and LNG facility remain challenging and must be reduced further," the company said. Mr. Shamsul said in the statement that Petronas hoped to make a decision as soon as possible, but he didn't specific a date. He noted the potential threat from more economically "competitive United States LNG projects."

The move comes just a week after British Columbia to the Petronas-led project, known as Pacific NorthWest LNG, and an associated natural-gas pipeline designed to connect the plant with gas fields hundreds of miles inland.

Pacific NorthWest LNG is among 18 LNG terminals proposed for shipping gas from Western Canada to global markets, but none have been built yet amid concerns about construction and operational costs. In October, BG Group PLC said it would of its Canadian LNG plans into the next decade.

Petronas said last week that it may be forced to next year between 15% and 20% due to the sharp fall in crude oil prices. But Mr. Shamsul told reporters at that time that his company was still on track for making a decision on the Canadian LNG plant in December.

The Malaysian company complained earlier this year about the burden of Canadian regulatory and tax policies. In response, British Columbia halved a planned gas export tax to 3.5%. But Petronas and other LNG project sponsors have said they are concerned about Canada's competitiveness compared with rival projects globally.

While most Canadian proposals are for plants built from scratch at huge cost on the remote and undeveloped northern coast of British Columbia, many U.S. LNG terminals involve cheaper retrofitting of existing equipment in heavily industrialized areas on the Gulf Coast.

In April, Petronas in Pacific Northwest LNG to China Petroleum & Chemical Corp., or Sinopec. Japan Petroleum Exploration Co. and Indian Oil Corp. each have 10% stakes in the project, along with 3% owned by Brunei National Petroleum Co.

Write to Chester Dawson at chester.dawson@wsj.com

Credit: By Chester Dawson

Subject: LNG; Natural gas; Petroleum industry; Costs; Crude oil prices

Location: Asia Western Canada British Columbia Canada North America

Company / organization: Name: Petronas; NAICS: 211111; Name: BG Group PLC; NAICS: 221210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 3, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629754388

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629754388?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Canadian Oil Sands Cuts Dividend, Citing Debt Load and Crude Price Drop

Author: Dawson, Chester

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract:

Six other companies own the remainder, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company.

Links: 360 Link to Full Text

Full text:

CALGARY--Canadian Oil Sands Ltd., the largest owner of the giant Syncrude oil-sands joint venture, said Wednesday it plans to slash its dividend by nearly half to cope with a rising debt load and the recent swoon in global prices for crude oil.

The Calgary-based company said its dividend payment will drop to 20 Canadian cents a share ($0.18) in the fourth quarter, down 43% from the 35 Canadian cents a share it paid investors in the third quarter. It said the move was necessary to stabilize its balance sheet in a lower oil price environment.

"At the current dividend level, net debt would grow at a pace that would quickly exceed $2 billion," Canadian Oil Sands said in a statement. Net debt stood at C$1.7 billion as of September 30, the company said when it reported third quarter earnings in October.

Canadian Oil Sands projected cash flow from operations in 2015 of C$730 million, or C$1.51 per share, based on an oil price assumption of $75 per barrel of West Texas Intermediate crude. That is down sharply from the C$1.27 billion, or C$2.62 per share, it expects to earn this year based on WTI of $85 to $103 per barrel.

The company also said it plans to increase crude production about 6% next year to between 35 and 40 million barrels of oil and reduce 2015 capital spending to C$564 million, down from an estimated C$938 million this year. It said the lower budget stemmed from the completion of several major reinvestment projects.

Canadian Oil Sands, which in third-quarter net profit, has struggled to cope with a series of unplanned outages at Syncrude's surface-mining operations. Canadian Oil Sands owns a 37% stake in its main operating asset, Syncrude, which is one of the largest and oldest oil-sands producers.

Six other companies own the remainder, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company.

Write to Chester Dawson at

Credit: By Chester Dawson

Subject: Oil sands; Petroleum industry; Stock prices; Energy economics; Debt restructuring; Dividends

Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Imperial Oil Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629779886

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629779886?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Oil Trains Hide in Plain Sight; Rail Industry's Secret: Volatile Crude Routes Often Kept From Cities and Towns

Author: Gold, Russell

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

NEWARK, Del.--Early last year, a new kind of pipeline full of volatile oil appeared in this college town, halfway between Philadelphia and Baltimore.

If it had been a traditional pipeline, there would have been government hearings and environmental reviews. There would be markers or signs along the line's route and instructions for nearby residents on how to react in an emergency. A detailed plan for responding to a spill would be on file with the federal government.

None of that happened here in Newark. In fact, nobody initially notified the city's fire chief about the new line, which can carry more than a hundred thousand barrels of oil a day along Amtrak's busiest passenger-rail corridor.

This was possible because the oil here is transported by a virtual pipeline: mile-long strings of railroad tanker cars that travel from North Dakota to a refinery in Delaware. In Newark, the cars are especially easy to spot as they often sit for hours on tracks 10 feet away from passing passenger trains, waiting for an opening at the nearby PBF Energy Inc. plant.

While the existence of this virtual pipeline is obvious to its neighbors--trains are visible from homes, the local commuter rail station, a park and a popular jogging trail--it is officially secret. Delaware Safety and Homeland Security officials contend that publicizing any information about the oil trains parked there would "reveal the State's vulnerability to terrorist attacks," according to a letter to The Wall Street Journal.

Finding the locations of oil-filled trains remains difficult, even in states that don't consider the information top secret. There are no federal or state rules requiring public notice despite several fiery accidents involving oil trains, including one in Lac-Mégantic, Quebec, that killed 47 people.

The desire for secrecy seems wrongheaded to some experts. "If you don't share this information, how are people supposed to know what they are supposed to do when another Lac-Mégantic happens?" asked Denise Krepp, a consultant and former senior counsel to the congressional Homeland Security Committee.

She said more firefighting equipment and training was needed urgently. "We are not prepared," she said.

In May, federal regulators ordered railroads to tell states about the counties traversed by trains carrying combustible crude oil from the Bakken Shale in North Dakota so local first responders could be notified.

The Journal submitted open-records requests to all 48 contiguous states and the District of Columbia and received at least some information from all but 14: Colorado, Delaware, Idaho, Indiana, Louisiana, Maine, Maryland, Michigan, Nevada, Ohio, Tennessee, Texas, Vermont and West Virginia.

Mapping data received from the disclosing states, the Journal found a lot of other cities in the same situation as Newark. On its way to refiners on the East Coast and along the Gulf of Mexico, oil often sits in tank cars in railroad yards outside Harrisburg and Pittsburgh, Penn., and passes through Cleveland, Chicago, Albany, Seattle and a dozen other cities.

Bakken oil is flowing in two directions from North Dakota: west toward Portland and the Puget Sound; and east through Minneapolis, then southeast through Chicago, and across the northern edge of Indiana and Ohio. There it splits into three routes: One heads to Albany; another goes to Yorktown, Va., where the crude is transferred to barges for trips up and down the East Coast. The third heads to Philadelphia through Ohio, which is one of the states that doesn't disclose data, but the Journal was able to deduce the routes by following available maps.

Other oil trains run south from Oregon to California, from Minnesota to Texas, and from Wisconsin toward the Gulf Coast.

Maryland previously had attempted to release oil-train information, but was successfully sued by Norfolk Southern Corp. and CSX Corp. Norfolk argued that these trains were carrying "highly volatile cargo" that could be a target for terrorists.

Railroads have continued to press for secrecy; in August, the Association of American Railroads and the American Short Line and Regional Railroad Association wrote a confidential letter to the federal government asking that routing information be kept from the public. The request was denied.

"The rail industry is concerned making crude oil route information public elevates security risks by making it easier for someone intent on causing harm," said AAR spokesman Ed Greenberg. The group said it supports sharing information with local officials.

Neither the oil nor the railroad industry anticipated the rapid and dramatic rise of oil shipments by train. In 2009, U.S. railroads transported about 21,000 barrels a day of oil; today they carry 1.1 million barrels a day, according to data from the Surface Transportation Board, a federal regulator. Last year, railroads generated about $2.15 billion in revenue from moving crude.

Shipments of hazardous material, especially crude oil, have soared recently, even for railroads whose routes are far from the oil fields of North Dakota. Norfolk Southern and CSX, which serve the East Coast, moved 53,001 carloads of oil in the three months ended September, compared with just seven carloads during the same period of 2009, according to data from the federal Surface Transportation Board. They transported 156,731 carloads of industrial chemicals, some of which are hazardous, in the third quarter of this year, up 8% from five years ago.

Trains are the new pipelines, and have become a vital link in the energy infrastructure, said Dave Pidgeon, a spokesman for Norfolk Southern. "We are the keystone, the bridge, between the source of where the energy is extracted and where it is refined," he said. Moving hazardous material like crude, he added, is "safe and getting safer."

CSX didn't respond to requests for comment.

Trains offer the energy industry flexibility to move oil where it can fetch the highest prices. Building the needed loading and unloading terminals is fast and inexpensive, and an extensive rail network connects the Midwest to the East and West coasts.

While these virtual pipelines can be created in months, traditional pipelines have become increasingly difficult to install as environmental groups seek to block permits for new energy infrastructure.

"What we are seeing on rail is largely due to opposition to and uncertainty around building pipelines," said Brigham McCown, who was the chief pipeline regulator under President George W. Bush. Pipelines, he adds, are far safer than trains.

Since Lac-Mégantic, several trains have derailed and exploded. Most of these accidents have happened in relatively rural areas like Casselton, N.D., a town of about 2,500 people 24 miles west of Fargo. But one occurred in downtown Lynchburg, Va., forcing the evacuation of much of the downtown in a city with 78,000 residents.

In response, railroads agreed to slow oil trains to 40 miles an hour in urban areas, and federal regulators have proposed a broader speed limit for older tank cars carrying volatile crude oil.

The rules don't apply to other freight trains or Amtrak trains that share tracks in Newark with oil trains; about 85 Amtrak trains run through Newark every day, according to a spokesman, at speeds of up to 100 miles an hour. In addition to Norfolk Southern, which operates on the outskirts of town, CSX runs oil trains on a wholly separate track heading north toward refineries near Philadelphia.

Without oil trains, the local PBF Refinery might not be operating. Opened in 1956 on the Delaware River, the refinery handled imported oil that arrived by water from overseas; it was mothballed in 2009 as the economics of importing crude oil soured and demand for gasoline slumped.

PBF bought the refinery in 2011, reopened it the next year and began adding facilities to unload crude from trains. The company owns or leases 4,000 tank cars, has 1,900 more on order and said it is committed to using the safest cars available.

The refinery built a double loop that can accommodate two trains, each holding 70,000 barrels of crude. It can take workers 14 hours to unload each train by connecting hoses to drain out the cargo.

The Bakken crude contains a lot of butane, making it volatile but useful for mixing with heavier oils or as a refined byproduct, said refinery manager José Dominguez. On a recent afternoon, the refinery was running mostly Bakken oil, along with some diluted crude from Canadian oil sands and a ship's worth of light sweet oil from Basra, Iraq.

When Norfolk Southern began routing crude trains through Newark, it didn't notify the local emergency officials. Last March, a year after trains started turning up, Fire Chief A.J. Schall sat down with officials from the railroad and refinery to discuss the crude shipments.

"It shows a lack of communication," he said. By the summer, Norfolk Southern and PBF paid for Mr. Schall and another local fire chief to fly to Colorado and attend a three-day class on crude-by-rail trains.

Some people who live and work along the tracks say that they are disquieted by the increased traffic and especially of the new presence of mile-long strings of black tanker cars, but unaware of any new accident-preparedness plans.

Demitri Theodoropoulos, who manages a record store facing the intersection, said that since 2004 his security cameras have recorded 14 collisions, including one in 2012 when a train smashed into a large truck.

"We have major, major freight traffic here," he said. "I see trains with crude every day or so. I don't like it, but this is the way it is."

Write to Russell Gold at

Credit: By Russell Gold

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629825754

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629825754?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Malaysia Stocks Slipping on Oil Slide; Malaysia Market Facing Biggest Fall Since Global Financial Crisis

Author: Jake Maxwell Watts

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract:

If inflation stays low in Malaysia, as Credit Suisse says is likely, it would reduce the chances of an interest-rate increase by the central bank, which analysts say wouldn't want to risk further jeopardizing a slower rate of economic growth. Raymond Lim, head of Asian bonds at Amundi in Singapore, said he is optimistic that the inflation consequences of the Malaysian government's decision this year to cut fuel subsidies will be offset by falling oil prices.\n

Links: 360 Link to Full Text

Full text:

One of the biggest victims of is Malaysia, Asia's top crude exporter, where the stock market is on track for its first annual decline since the global financial crisis and ranks as the region's worst performer this year.

The FTSE Bursa Malaysia KLCI has fallen 6.5% in 2014, the only market in Southeast Asia to record a loss for the year, as investors look instead to markets such as India and Indonesia and dump holdings in oil-related stocks.

The ringgit has also suffered, dropping to 3.4470 per U.S. dollar on Thursday, its weakest level in nearly five years. Yields on 10-year government bonds have risen to 3.89%, from a 12-month low of 3.78% in mid-October. Bond yields rise as prices fall.

"Malaysia is one of the weakest markets within the region. In the context of drops, it is not very large. But relative to the traditional low beta of the market, it is a big move," said Gan Eng Peng, head of equity at Affin Hwang Asset Management Bhd. in Malaysia, referring to a measure of volatility. The firm is selling out of oil-and-gas companies and moving into stocks that may benefit from lower oil prices. It is also increasing its holdings of cash to more than 20% in most of its funds, a high level for almost any manager.

As Asia's biggest exporter of crude oil, Malaysia is first in the firing line for investors looking to protect themselves from a slump in global oil prices. Brent crude, the global benchmark, was down 84 cents at $69.08 a barrel Thursday morning in New York, on track to settle at a five-year low. Oil prices have dropped steadily in recent months on demand weakness and competition from other energy sources, especially U.S. shale oil and gas.

Crude prices were hit further last week after the Organization of the Petroleum Exporting Countries, or OPEC, decided .

Malaysia's central bank on Thursday reminded local lenders to ensure that all short-dated transactions involving the ringgit--typically regarded as those that drive currency volatility--are backed up by documentation. A spokesperson said the note was a reminder of existing requirements.

Malaysia's main stock index hasn't clocked a full-year loss since the financial crisis hit in 2008 and the index lost 39%. Since then, it has risen more than 10% every year with the exception of 2011, when it rose 0.8%.

The losses in the past week have even the most bullish of fund managers turning away. Eastspring Investments, which manages about 28 billion ringgit ($8.1 billion) in Malaysian equities, says it has been selling stocks and turning to cash in a bid to lock in profit.

"Our view on the small caps has turned quite cautious," said Yvonne Tan, chief investment officer. "Quite a number of corporates are missing their forecasts, so we are actually quite selective." Eastspring is holding more cash in its funds and waiting for the market to bottom out before it starts looking to buy again, Ms. Tan said.

Malaysia's largest listed oil-and-gas services provider, SapuraKencana Petroleum Bhd., has been among the biggest losers, dropping 20% in the two days after the OPEC decision and now trading at its lowest level in more than four years. Another oil-related stock, state-controlled Petronas Dagangan Bhd., has fallen more than 6% since the Nov. 27 OPEC meeting.

Petronas Dagangan's parent company, state-owned Petroliam Nasional Bhd., is by as much as 20%, according to its chief executive, who told media last week that it may also trim its dividend payments to the government. Petronas, as the parent company is also known, contributes about $10 billion each year to the national budget and is Malaysia's sole Fortune 500 company.

Analysts warn that, over the longer term, the impact on Malaysian stocks will be felt in nonoil industries, too. Credit Suisse says that if oil prices remain at $70 a barrel, Malaysia's economic growth could slow to 4.4% next year, well below the 5% to 6% expected by the central bank for this year.

Saudi Arabia, OPEC's largest producer of crude oil, , The Wall Street Journal reported Wednesday.

If inflation stays low in Malaysia, as Credit Suisse says is likely, it would reduce the chances of an interest-rate increase by the central bank, which analysts say wouldn't want to risk further jeopardizing a slower rate of economic growth. That would make the ringgit a less attractive prospect than many other Asian currencies, while other central banks in the region contemplate raising rates.

Some fund managers are sticking to the original script, however. Raymond Lim, head of Asian bonds at Amundi in Singapore, said he is optimistic that the inflation consequences of the Malaysian government's decision this year to cut fuel subsidies will be offset by falling oil prices. Amundi is cautious on Malaysian government bonds, but still likes the ringgit. It expects the central bank to raise interest rates in the first quarter next year.

It isn't just oil prices that are contributing to the malaise in Malaysia. Maybank Investment Bank research, which covers 74% of the Malaysian bourse by market capitalization, calculates that core net profit for the companies it tracks contracted an average of 5.5% year-on-year in the third quarter.

Affin Hwang's Mr. Gan said the only good news could be that nonoil-related stocks may be suffering more than is justified. However, with share prices down, oil prices lower and capital expenditures being cut, he expects more business and financial disruptions to come. "A credit crunch within the oil-and-gas space is a possibility," he said.

Jason Ng contributed to this article.

Credit: By Jake Maxwell Watts

Subject: Crude oil prices; Petroleum industry; Crude oil; Stock exchanges; Investments; Economic crisis; Central banks; Natural gas utilities

Location: India United States--US Malaysia Indonesia Southeast Asia

Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: Eastspring Investments; NAICS: 523930

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629870095

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629870095?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

MoneyBeat / Market insight from WSJ.com: Oil Bear Cleans Up on Spill --- Trilogy Has Returned 8% This Year

Author: Wirz, Matt

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Dec 2014: C.5.

ProQuest document link

Abstract:

The thesis behind the trade was that companies that borrowed heavily to finance costly drilling, like extracting oil from tar sands in the Canadian tundra, would become cash-flow negative if oil prices fell for a prolonged period.

Links: 360 Link to Full Text

Full text:

The selloff in bonds issued by energy companies continued this week but at least one investor isn't terribly bothered by the downturn: Barry Kupferberg, head of research at $250 million credit hedge fund Trilogy Capital.

This spring, the firm founded by former Bear Stearns bond salesman Jonathan Rosenstein made large short bets against bonds of energy companies with high production costs, expecting that slowing demand from China would depress oil prices.

The bearish wagers helped Trilogy post a positive return in September when the average hedge fund lost 0.89%. The firm has returned about 8% this year through October, almost three times the hedge-fund average of 3%, according to data provider HFR Inc.

Some energy-company bonds have fallen more than 50% in the past three months but Trilogy remains bearish for now, Mr. Kupferberg says. "Usually when these downturns end, they don't end until you see real capitulation, meaning bankruptcies."

One company that is struggling is Quicksilver Resources Inc., an independent oil-and-gas producer that borrowed about $1.8 billion in 2008 to pay for a large acquisition.

The company violated minimum performance covenants in its bank loans earlier in the year and prices of its bonds have fallen to 20 cents on the dollar from around 90 cents in August on concerns that it will default.

Quicksilver has hired investment banks to explore asset sales, while bondholders have hired Moelis & Co. to advise on a potential restructuring of the company's debt, a person familiar with the matter said.

Credit: By Matt Wirz

Subject: Petroleum industry; Return on investment; Hedge funds

Location: China

Company / organization: Name: Quicksilver Resources Inc; NAICS: 211111; Name: Moelis & Co; NAICS: 523110; Name: Bear Stearns Cos Inc; NAICS: 523120, 523140; Name: Trilogy Capital Partners Inc; NAICS: 541820

Classification: 9180: International; 3400: Investment analysis & personal finance; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.5

Publication year: 2014

Publication date: Dec 4, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629872572

Document URL: https://login.ezproxy.uta.edu/login?u rl=https://search-proquest-com.ezproxy.uta.edu/docview/1629872572?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Corporate News: Canadian Oil Sands to Slash Payout

Author: Dawson, Chester

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Dec 2014: B.2.

ProQuest document link

Abstract:

Six other companies own the remaining interest, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company.

Links: 360 Link to Full Text

Full text:

CALGARY -- Canadian Oil Sands Ltd., the largest owner of the giant Syncrude oil-sands joint venture, said Wednesday it plans to slash its dividend by nearly half to cope with a rising debt load and the recent swoon in global prices for crude oil.

The Calgary-based company said its per-share dividend payment will drop to 20 Canadian cents, or about 18 U.S. cents, in the fourth quarter, down 43% from the 35 Canadian cents a share it paid investors in the third quarter. It said the move was necessary to stabilize its balance sheet in a lower oil price environment.

Canadian Oil Sands projected cash flow from operations in 2015 of C$730 million, or C$1.51 a share, assuming a price of $75 a barrel for West Texas Intermediate crude oil. That is down sharply from the C$1.27 billion, or C$2.62 a share, it expects to earn this year, based on a WTI price of $85 to $103 a barrel.

Canadian Oil Sands, which reported a 65% drop in third-quarter net profit, has struggled to cope with a series of unplanned outages at Syncrude's surface-mining operations.

Canadian Oil Sands owns a 37% stake in Syncrude, its main operating asset and one of the largest and oldest oil-sands producers.

Six other companies own the remaining interest, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company.

Credit: By Chester Dawson

Subject: Oil sands; Petroleum industry; Debt restructuring; Dividends

Location: United States--US Canada

Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Imperial Oil Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Canadian Oil Sands Ltd; NAICS: 211111

Classification: 9172: Canada; 8510: Petroleum industry; 3100: Capital & debt management

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.2

Publication year: 2014

Publication date: Dec 4, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629872905

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629872905?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Russia to Pump Up Oil Exports to Asia

Author: Yep, Eric

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]investors have raised concerns about Russia's ability to meet its target due to the lack of adequate supply infrastructure and investment, Western sanctions and the recent drop in that puts oil production at risk Earlier this year, U.S. and Europe had imposed sanctions against Moscow for causing unrest in Ukraine, cutting off financing and technological support for offshore and Arctic exploration.

Links: 360 Link to Full Text

Full text:

SINGAPORE--Russia plans to keep increasing its oil exports to Asia despite plummeting oil prices and , even as its oil supplies to the region hit this year.

Russia is making a strategic push to increase its energy exports to Asia, as energy demand in its traditional markets in Europe has stagnated and its relationship with countries there has been strained by sanctions over Moscow's role in the conflict in Ukraine.

Russia's oil exports to Asia have been spearheaded by the East Siberia-Pacific Ocean, or ESPO, since 2009. The pipeline feeds directly into northern China and up to the port of Kozmino in eastern Russia where crude is loaded on ships to supply the rest of Asia

"We do not expect a drop in production that will be going eastward," Alexander Gladkov, director at the oil and gas production and distribution arm of Russia's energy ministry, said Wednesday. He was speaking at the OSEA 2014 Conference in Singapore.

An increase in Russian crude supply to Asia allows countries such as China and Japan to reduce their reliance on Middle Eastern oil producers, and helps Moscow meet its target of sending a third of its crude exports to the east by 2020.

The ESPO pipeline system toward Kozmino is being developed further to boost its total capacity to 80 million tons a year by 2018, from around 50 million tons currently, Mr. Gladkov said.

But investors have raised concerns about Russia's ability to meet its target due to the lack of adequate supply infrastructure and investment, Western sanctions and the recent drop in that puts oil production at risk

Earlier this year, U.S. and Europe had imposed sanctions against Moscow for causing unrest in Ukraine, cutting off financing and technological support for offshore and Arctic exploration. Oil prices have also fallen by around 35% since June, erasing margins for oil producers with high costs and threatening to trigger large spending cuts by oil and gas companies.

"From our point of view there should not be any change in production volumes due to oil prices," Mr. Gladkov said, since the raft of oil export projects in Russia were based on an oil price much lower than $100 a barrel. "The decision to transport more [oil] eastward and expand capacity is without any doubt linked to the availability of an array of [oil] fields that are feeding or will potentially be feeding into the system," he added.

He said Russia's oil and gas reserves in western Siberia are gradually depleting and the country's key oil producing region is now eastern Siberia, whose energy output is aimed at Asian markets.

Russian oil exports through the ESPO pipeline have averaged around 820,000 barrels a day so far this year, a record high, according to Argus Media Ltd., an oil pricing agency. This will top 1.1 million barrels a day next year and the new supply can be sold via the port of Kozmino, Sergey Andronov, vice president of Russian pipeline company OAO Transneft said.

Seaborne oil exports via Kozmino have been widely bought by China, Japan, South Korea, Philippines, Thailand, Singapore, Australia, New Zealand and Taiwan.

Last year, state-run oil producer OAO Rosneft signed with China National Petroleum Corp. to double oil supply to 600,000 barrels a day from 2018 for 25 years. Russian oil has been also making its way to Asia through the Sakhalin project in the east, and a swap agreement with Kazakhstan and China that took effect this year.

Write to Eric Yep at

Credit: By Eric Yep

Subject: Pipelines; Petroleum industry; Oil reserves; Exports; Sanctions; Prices; Petroleum production; Natural gas utilities

Location: China Japan Asia Europe Ukraine

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629874120

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629874120?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Saudis: Oil to Firm at $60 --- Shift by OPEC's Biggest Producer Suggests It Won't Push for Supply Reductions

Author: Said, Summer; Kent, Sarah; Faucon, Benoit

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Dec 2014: C.1.

ProQuest document link

Abstract:

The change in Saudi mind-set also suggests OPEC members may have to adapt swiftly to shifts in the oil market caused by a surge in supply from the U.S. shale revolution and slowing global demand growth.

Links: 360 Link to Full Text

Full text:

LONDON -- OPEC's biggest oil producer, Saudi Arabia, now believes oil prices could stabilize at around $60 a barrel, a level both it and other Gulf producers believe they could withstand, according to people familiar with the situation.

The shift in Saudi thinking suggests the de facto leader of the Organization of the Petroleum Exporting Countries won't push for supply cuts in the near term, even if oil prices fall further. Brent crude dropped 62 cents a barrel to $69.92 on Wednesday.

As recently as early November, OPEC officials were talking about $70 a barrel as the sustained level at which there would be panic within its ranks.

The Gulf states "don't have a price target, and if prices drop further below $60, it won't be for a long time," a Gulf oil official said.

Before last week's OPEC meeting in Vienna, the Saudis had been considering a Venezuelan proposal to cut the producer group's oil output sharply. The possible deal finally fell apart when Russia, a major oil producer that isn't a member of OPEC, refused to participate in a general supply cut, said people familiar with the situation.

That gave Saudi Arabia and its Gulf allies cover to push an unpopular strategy at OPEC's main meeting last Thursday of not changing the cartel's production target, in an attempt to defend market share rather than prices.

That view prevailed, leading Brent crude to fall 10% in the past week.

Analysts said the new insight into Saudi Arabia's views on the oil market was likely to keep prices subdued in the coming months and would thwart chances for a strong rebound.

"It's just another factor that solidifies the bearish outlook," said Kyle Cooper, managing partner of research consultancy IAF Advisors in Houston.

The Saudis "have seen their market share be continually diminished, especially in the U.S., and I think they've grown weary of it."

During an early November meeting on the Venezuelan resort island of Margarita, Saudi Arabia's oil minister, Ali al-Naimi, had told Venezuela Foreign Minister and OPEC representative Rafael Ramirez he would support a cut only if the Venezuelan minister could persuade others inside and outside of the cartel to participate, according to people familiar with the situation.

It was a "mission impossible," said one OPEC delegate. Struggling OPEC members like Iran, Libya and Iraq argue they should be exempted from any move to cut output. Historically, persuading non-OPEC members to join the group in reducing supply has met with limited success.

However, just 48 hours before OPEC's semiannual meeting last Thursday, Mr. Ramirez gathered senior energy officials from Saudi Arabia, Russia and Mexico -- another non-OPEC member -- in Vienna's Hyatt hotel.

On the table was a proposal to take two million barrels a day of oil supply out of the global market of more than 90 million barrels a day, according to people familiar with the situation. The bulk of the cut was to be shouldered by OPEC, but Russia and Mexico combined were expected to contribute a reduction of 500,000 barrels a day, the people said.

The meeting ended without any deal to cut supply, Mr. Ramirez told reporters immediately afterward. Within hours, Russian state oil company OAO Rosneft said it wouldn't cut its oil output.

Mr. al-Naimi finally decided it would be better to endure short-term pain from low oil prices than risk losing market share in the long run, according to people familiar with the situation.

"The market will stabilize itself eventually," he told reporters. He conveyed this message first to his Gulf allies -- countries such as Kuwait and the United Arab Emirates -- and then during a four-hour debate among all of OPEC's ministers last Thursday, according to delegates briefed on the gathering.

Mr. al-Naimi rebuffed calls led by Venezuela for the oil-producing cartel to reduce its output by 5%, arguing it would cost OPEC market share without guaranteeing prices would improve, the people said.

He told the ministers enduring lower prices would force high-cost oil producers outside of OPEC, like U.S. shale-oil companies, to cut production themselves, tightening the market by the second half of 2015.

Credit: By Summer Said, Sarah Kent and Benoit Faucon

Subject: Petroleum industry; Cartels; Market shares; Price stabilization; Crude oil prices

Location: Russia United States--US Saudi Arabia

Company: Organization of Petroleum Exporting Countries--OPEC

Classification: 9180: International; 3400: Investment analysis & personal finance; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.1

Publication year: 2014

Publication date: Dec 4, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629893387

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629893387?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Hiding in Plain Sight: Shale Oil's Secret Routes to Market

Author: Gold, Russell

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Dec 2014: A.1.

ProQuest document link

Abstract:

[...]nobody initially notified the city's fire chief about the new line, which can carry more than a hundred thousand barrels of oil a day along Amtrak's busiest passenger-rail corridor.

Links: 360 Link to Full Text

Full text:

NEWARK, Del. -- Early last year, a new kind of pipeline full of volatile oil appeared in this college town, halfway between Philadelphia and Baltimore.

While the existence of this virtual pipeline is obvious to its neighbors -- trains are visible from homes, the local commuter rail station, a park and a popular jogging trail -- it is officially secret. Delaware Safety and Homeland Security officials contend that publicizing any information about the oil trains parked there would "reveal the State's vulnerability to terrorist attacks," according to a letter to The Wall Street Journal.

The desire for secrecy seems wrongheaded to some experts. "If you don't share this information, how are people supposed to know what they are supposed to do when another Lac-Megantic happens?" asked Denise Krepp, a consultant and former senior counsel to the congressional Homeland Security Committee.

She said more firefighting equipment and training was needed urgently. "We are not prepared," she said.

Other oil trains run south from Oregon to California, from Minnesota to Texas, and from Wisconsin toward the Gulf Coast.

CSX didn't respond to requests for comment.

Since Lac-Megantic, several trains have derailed and exploded. Most of these accidents have happened in relatively rural areas like Casselton, N.D., a town of about 2,500 people 24 miles west of Fargo. But one occurred in downtown Lynchburg, Va., forcing the evacuation of much of the downtown in a city with 78,000 residents.

In response, railroads agreed to slow oil trains to 40 miles an hour in urban areas, and federal regulators have proposed a broader speed limit for older tank cars carrying volatile crude oil.

The refinery built a double loop that can accommodate two trains, each holding 70,000 barrels of crude. It can take workers 14 hours to unload each train by connecting hoses to drain out the cargo.

The Bakken crude contains a lot of butane, making it volatile but useful for mixing with heavier oils or as a refined byproduct, said refinery manager Jose Dominguez. On a recent afternoon, the refinery was running mostly Bakken oil, along with some diluted crude from Canadian oil sands and a ship's worth of light sweet oil from Basra, Iraq.

"We have major, major freight traffic here," he said. "I see trains with crude every day or so. I don't like it, but this is the way it is."

(See related letters: "Letters to the Editor: We Must Transport Our Shale-Oil Bounty With Safety" -- WSJ Dec. 15, 2014)

Credit: By Russell Gold

Subject: Pipelines; National security; Railroads; Oil shale; Railroad accidents & safety

Location: California Delaware North Dakota United States--US

Company / organization: Name: Amtrak; NAICS: 482111; Name: PBF Energy; NAICS: 324110; Name: Norfolk Southern Corp; NAICS: 482111

Classification: 9190: United States; 8510: Petroleum industry; 8350: Transportation & travel industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.1

Publication year: 2014

Publication date: Dec 4, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629893683

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629893683?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Futures Slide on Saudi Price Cut to U.S. Ample Global Supplies Weigh on Oil Prices

Author: Friedman, Nicole; Said, Summer

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract:

The U.S. Energy Information Administration said Thursday that the country's proven reserves of crude oil and condensate - the resources that are recoverable with current technology and prices - rose to 36.5 billion barrels in 2013, the highest level since 1974.

Links: 360 Link to Full Text

Full text:

The global oil benchmark slid to a fresh more-than-four-year low Thursday after Saudi Arabia cut the price of its oil in the U.S., reinforcing concerns that the kingdom is more concerned with maintaining market share than raising prices.

Oil prices have slumped for months as global supply growth, particularly from the U.S., has outpaced demand. The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the biggest producer, decided last week . The cartel has lowered production to raise prices in the past, and its decision to maintain its output target sent prices tumbling.

State-run oil company Saudi Aramco on Thursday by between 10 and 90 cents a barrel. The company also lowered its prices to Asia and raised them for Northwest Europe and the Mediterranean.

"The Saudis are making it very clear that they're going to do whatever it takes to maintain market share," said Phil Flynn, analyst at the Price Futures Group in Chicago. "If it means taking prices to $60 a barrel or $50 a barrel, they're prepared to do whatever it takes."

Brent, the global benchmark, slid 28 cents, or 0.4%, to $69.64 a barrel on ICE Futures Europe, the lowest settlement since May 25, 2010.

U.S.-traded light, sweet oil for January delivery fell 57 cents, or 0.9%, to $66.81 a barrel on the New York Mercantile Exchange.

Saudi Arabia now believes oil prices , a level both it and other Gulf producers believe they could withstand, according to people familiar with the situation. That suggests the de facto OPEC leader won't push for supply cuts in the near term, even if oil prices fall further.

Another Saudi price cut to the U.S. is "tantamount to a declaration of war to U.S. shale-oil producers, in view of the significant decline in the price of the benchmark [U.S. oil]," said Commerzbank in a note. "U.S. shale-oil producers already find themselves confronted with very low prices."

U.S. oil production has soared above 9 million barrels a day for the first time in decades due to new technologies enabling producers to access supplies trapped in shale-oil fields. The U.S. Energy Information Administration said Thursday that the country's proven reserves of crude oil and condensate - the resources that are recoverable with current technology and prices - rose to 36.5 billion barrels in 2013, the highest level since 1974.

However, prices have fallen in recent months to levels that could threaten the viability of shale production. Some companies have already reduced capital expenditure plans for next year.

January reformulated gasoline blendstock, or RBOB, fell 1.22 cents, or 0.7%, to $1.7948 a gallon, the lowest level since Oct. 9, 2009.

January diesel fell 1.57 cents, or 0.7%, to $2.1177 a gallon, the lowest settlement since Sept. 23, 2010.

Write to Nicole Friedman at and Summer Said at

Credit: By Nicole Friedman And Summer Said

Subject: Petroleum industry; Market shares; Petroleum production; Price cuts

Location: United States--US Saudi Arabia

Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629921782

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629921782?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Saudi Arabia Cuts All January Crude Oil Prices to U.S., Asia; Saudi Aramco Cuts January Arab Light Prices to Asia By $1.9 a Barrel

Author: Said, Summer

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]in recent months, amid a steep drop in global crude prices, the settings have been closely followed by market watchers looking for signs about Saudi oil policy.

Links: 360 Link to Full Text

Full text:

Saudi Arabia, the world's largest oil exporter, deepened the discount at which it sells crude to Asia and the U.S., underscoring for some market watchers the kingdom's commitment to defending its market share amid the recent rout in oil prices.

The move comes a week after Riyadh persuaded fellow OPEC members to maintain the group's production target, instead of reining in output significantly to support prices.

Brent crude, the global benchmark, slid 0.4% to $69.64 a barrel on the news, reversing earlier gains. That's the lowest level since May 2010 and brings Brent's year-to-date decline to 37%. U.S. crude-oil prices dropped 0.8% to $66.81 a barrel, but remained above the more-than five-year low hit Nov. 28.

State-owned Saudi Aramco Oil Co., also known as Saudi Aramco, said Thursday that it had reduced its official selling prices for all oil grades bound for Asia in January by between $1.50 and $1.90 a barrel, compared with December. It dropped prices for all crude grades to the U.S. by between 10 cents and 90 cents a barrel.

Thursday's discounts to Asia "would herald in a new round in the battle for market shares," said Carsten Fritsch, an analyst at Commerzbank. He said the U.S. discounts were "tantamount to a declaration of war to U.S. shale oil producers," given the steep fall already in U.S. benchmark prices.

Aramco, however, raised prices for all crude grades to Northwest Europe and Mediterranean destinations by between 20 cents and 50 cents a barrel compared with the December prices.

Saudi Aramco sets its prices relative to regional benchmark crude-oil prices. It sells at different prices in different regions mainly to reconcile buyer demand with market fluctuations in those benchmarks. The price-setting process is typically a technical move with little impact on the broader market. But in recent months, amid a steep drop in global crude prices, the settings have been closely followed by market watchers looking for signs about Saudi oil policy.

Saudi Arabia, the biggest producer by far in the Organization of the Petroleum Exporting Countries, and its Gulf allies pushed the group at its Nov. 27 meeting . People familiar with the matter said Riyadh argued that Aramco also cut its U.S. pricing last month, .

The Wall Street Journal reported Wednesday that a level both it and other Gulf producers believe they could withstand. The shift in Saudi thinking suggests the country won't push for supply cuts in the near term, even if oil prices fall further.

Kuwait's deputy finance minister, Khalifa Hamada, said at a local news conference on Thursday that the country was likely to base its 2014-2015 budget on an oil price of $55 to $60 a barrel.

Write to Summer Said at

Credit: By Summer Said

Subject: Petroleum industry; Crude oil prices; Price increases

Location: United States--US Asia Saudi Arabia

Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629928861

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629928861?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Gold Eases After ECB Leaves Policy Unchanged; ECB Abstains From Stimulus, Citing Lower Oil Prices

Author: Shumsky, Tatyana

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract:

NEW YORK--Gold futures ended lower Thursday after the European Central Bank stood pat on monetary policy and as investors brace for upcoming U.S. employment data.

Links: 360 Link to Full Text

Full text:

NEW YORK--Gold futures ended lower Thursday after the European Central Bank stood pat on monetary policy and as investors brace for upcoming U.S. employment data.

Gold for February delivery, the most actively traded contract, fell $1, or 0.1%, to settle at $1,207.70 a troy ounce on the Comex division of the New York Mercantile Exchange.

ECB officials left interest rates unchanged and refrained from announcing new stimulus efforts. ECB President Mario Draghi, in a news conference following the decision, highlighted weaker oil prices as one reason the central bank abstained from action. Mr. Draghi said the precipitous drop in energy costs is having a meaningful impact on the economy and needs further study.

Mr. Draghi also said ECB officials discussed buying all assets but gold for monetary easing purposes, rebuffing some investors who hoped the central bank would add to its hoard of the precious metal as part of its easing measures.

"They've said in the past that they wouldn't buy gold, but (Draghi's comments) added a lot of volatility to gold this morning," said George Gero, a senior vice president with RBC Capital Markets Global Futures.

Gold prices also fell as investors who bet the ECB would be more dovish on monetary policy by buying gold ahead of the decision sold off those positions on disappointment, said Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago.

"Gold's going to keep moving lower after the announcement as people look forward to tomorrow's jobs data," Mr. Haberkorn said.

The U.S. labor market's monthly scorecard, due at 8:30 a.m. EST Friday, is followed by gold traders seeking insight into the Federal Reserve's policy plans. The U.S. central bank has highlighted employment as a key metric for raising interest rates.

Gold prices have benefited from the Fed's protracted easy-money policies, as the yellow metal doesn't earn interest or dividends and has an easier time competing with interest-bearing assets like Treasury bonds when rates are pinned at zero.

Platinum futures hit a one-month high, helped by a stronger euro. Platinum is widely used in automotive exhaust filters in Europe. The January contract rose 1.5% to $1,245.90 a troy ounce, the highest since Oct. 30.

Write to Tatyana Shumsky at

Credit: By Tatyana Shumsky

Subject: Central banks; Gold markets; Monetary policy; Interest rates; Futures

Location: United States--US

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629936268

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629936268?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Alfa to Team Up With Pacific Rubiales on Mexico Energy Projects; Joint Venture to Bid in Mexico's Opening Round of Oil and Gas Blocks Early Next Year

Author: Harrup, Anthony

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

MEXICO CITY--Mexican conglomerate Alfa SAB said Thursday it has reached an agreement to form a joint venture with Canada-based Pacific Rubiales Energy Corp. to bid in Mexico's first round of oil and gas blocks and pursue other energy projects in the country.

The planned joint venture, in which each partner will hold a 50% stake, will study bidding in the opening round of blocks that the Mexican government is expected to begin tendering early next year.

It will also consider acquiring service contracts with a view to migrating them to exploration-and-production contracts, and developing other energy-related businesses including midstream projects, Monterrey-based Alfa said in a press release. Midstream activities include transportation, pipelines and wholesale marketing of petroleum products.

Alfa has close to a 20% stake in Pacific Rubiales, which has exploration and production operations in Colombia, Peru and other Latin American countries, and has expressed its intention of participating in the opening of Mexico's oil sector.

"This agreement is in line with our strategy to actively participate in the Mexican oil and gas industry, contributing to raise the competitiveness of its industrial sector by increasing the availability of energy resources," said Alfa, which has petrochemicals, auto parts, food and telecommunications businesses, in addition to shale oil and gas production in Texas. "We see a great opportunity for our two companies to have a strong position in the Mexican market."

Alfa shareholders recently approved a plan for the company to raise up to $1.2 billion for energy projects through the sale of new stock. Pacific Rubiales has said it has $1 billion earmarked for Mexico projects.

The changes in Mexico's energy laws, including constitutional amendments to end state oil company Petróleos Mexicanos's 76-year monopoly on the industry, is seen as the cornerstone of the structural changes that the administration of President Enrique Peña Nieto passed in its first two years.

The first bidding round includes a broad range of projects, such as mature oil fields, nonconventional reserves like shale oil and gas, deep-water drilling in the Gulf of Mexico, and shallow water projects.

Pemex, which was assigned around four-fifths of Mexico's proven and probable reserves ahead of the bidding, also plans to farm out some existing projects. Existing service contracts can also be switched to exploration and production contracts.

Alfa is among the Mexican companies with experience in the energy field that are expected to benefit from the opening of the oil sector, as private and foreign companies are allowed to explore for and produce oil for the first time since the 1938 oil nationalization.

Grupo Carso, the industrial and retail conglomerate controlled by billionaire Carlos Slim, recently reorganized its energy-related assets into a separate unit with drilling, exploration and production, leasing of rigs, and renewable electricity assets.

Write to Anthony Harrup at

Credit: By Anthony Harrup

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1629979104

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629979104?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Oil's Slump Threatens Norway's Economy; GDP to Suffer From Cuts in Oil-Investment Spending, Survey Shows

Author: Hovland, Kjetil Malkenes

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

OSLO--A sharp drop in oil prices since the summer is creating a heap of trouble for Norway.

Big investments in the oil sector have helped keep the Nordic country's economy humming along in recent years while many of its European peers faced sluggish growth or even recession. But signs are piling up that one of the world's wealthiest petro-economies is in for a significant slowdown.

A survey by Statistics Norway on Thursday said oil companies expect to reduce investment spending by 14% next year, which it said could drag the country's economic growth down to 1% from an estimated 2.6% this year. The dire forecast comes days after a leading sector trade union threatened to strike unless Norway's right-wing government acts to counter slowing activity and job cuts in the oil industry.

Norway's oil companies are already showing the strain. Statoil ASA, a 67% state-owned oil giant, has delayed major projects and said it will seek to slash costs by $1.3 billion a year from 2016. Last week Oslo-listed offshore rig owner Seadrill cancelled its dividend, sending its shares into a freefall.

"We're starting to get really worried," said Hilde-Marit Rysst, head of SAFE, the union that last weekend threatened to strike unless the government acted. Ms. Rysst said the union's threat was a sign of growing frustration at delayed projects, stagnating orders and layoffs.

As many as 10,000 Norwegian and foreign oil-industry workers have been laid off so far this year, analysts at DNB Markets estimate, equivalent to more than 10% of workers employed in the sector. Oil companies' spending on goods and services also generates significant economic activity in other sectors.

"You can clearly say that we're worried about the future," said Arild Jenssen, SAFE union representative at Seadrill subsidiary North Atlantic Drilling Ltd., adding that more than 300 of his colleagues are set to lose their jobs by next summer.

Statoil declined to comment on the strike threats, but said recent oil market volatility underscored the industry's challenges. It said it would continue with aggressive measures to cut costs.

"Statoil can't sacrifice competitiveness and profitability to avoid a necessary adjustment," said Statoil spokesman Jannik Lindbæk, Jr. "We must continue our improvement work."

Norway's Minister of Petroleum and Energy Tord Lien said in an email that the government understands the concerns of the employees in the petroleum industry. He said the government's most important contribution would be to provide a stable framework for investment and the award of new drilling licenses.

The oil sector's troubles may contribute to weaker consumer sentiment and spending thanks to slower wage growth next year, Statistics Norway said.

Still, even with a downturn, Norway is doing well relative to its European peers. The country's gross domestic product per capita from its 5 million population is 91% higher than the European Union average.

"We think Norwegian growth next year will be higher than growth in the euro area, despite the shock we've had," Statistics Norway researcher Torbjørn Eika said.

As Norway's oil sector struggles, other parts of its economy could prosper. Companies that export could get support from the fall in value of the Norwegian krone, which has weakened 18% against the dollar in the last six months. That could boost the competitiveness of firms such as aluminum producer Norsk Hydro ASA and fertilizer company Yara International ASA.

In case of a deeper, more protracted downturn, the country could also draw on its $870 billion oil fund, built up over the last 18 years, which has enough cash to cover government spending for more than five years.

In the streets of Oslo, Ole Tobias Eggen, a 53-year old computer worker at an Oslo-based brokerage, said few Norwegians are worried about their jobs yet, despite the recent oil-price drop and signs of slower growth.

"We've been so incredibly lucky compared with the rest of the world that few people can imagine any other scenario," he said.

"It doesn't look too bright. But I haven't heard anybody suggesting to start hoarding canned food yet," he said.

Write to Kjetil Malkenes Hovland

Corrections & Amplifications

Norway has a right-wing government. A previous version of the story mistakenly referred to the government as center-right.

Credit: By Kjetil Malkenes Hovland

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630028967

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630028967?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

'Pioneer' Review: Oil Rigged; A deep-sea diver finds himself under pressure from all sides in a Norwegian thriller that plumbs the depths of a North Sea oil conspiracy.

Author: Morgenstern, Joe

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

Gassiness in movies is usually an affliction. In "Pioneer" it's a plot point. The hero of this Norwegian thriller is a deep-sea diver, and the kind of gas that he and his fellow divers breathe is crucial to their survival. It's the early 1980s, soon after the discovery of vast oil reserves under the North Sea. The diver, Petter (Aksel Hennie) is part of a program of dangerous test dives meant to show that Norway can lay the undersea pipeline needed to bring the oil ashore. Petter is a high achiever, obsessed by the lure of the lower depths. Yet he's an innocent in the realm of geopolitics, and Norway, he discovers, isn't the only nation determined to cash in on the oil boom. An emerging conspiracy is dramatized erratically, with plot holes that drain suspense. What's admirable about "Pioneer" is its succession of interesting environments, both below and above the water's surface, and the quietly appealing figure at the center of the international intrigue.

Petter has no guile, or hidden ambitions. Landing for the first time on the seabed, at a depth of 500 meters, he declares happily, "That's one small step for a man, but a huge leap for an ordinary guy from the projects." (Like the movie as a whole, his declaration is partly in English and partly in Norwegian.) All too soon, though, this good, sweet-spirited man is transformed into a vengeful man by a deadly accident for which he is blamed.

That's when the actor who plays him unleashes the sort of power he displayed in a movie I recommended only last week, the 2011 Norwegian thriller "Headhunters." Mr. Hennie can easily pass for an ordinary guy, with his candid smile and receding hairline. But his extraordinary range gives his character what it takes to face the big guys--all of the contending, and conspiring, scientists, government officials and corporate executives who've been willing to use the divers as guinea pigs. (One of Petter's heroic distinctions is his struggle with brain damage he has suffered in the course of the test-dive program.)

The director was Erik Skjoldbjærg, the excellent filmmaker who did "Insomnia"--later remade by Christopher Nolan--as well as "Prozac Nation"; the film was shot by the Swedish cinematographer Jallo Faber. The story has a basis in real life; lawsuits alleging neurological damage were brought by Norwegian divers against their government, and are still being adjudicated. But the script, credited to four writers plus the director, follows a standard thriller formula, with a Hitchcockian hero who doesn't understand what's happening to him. In a cast that includes Wes Bentley, Stephen Lang and Jonathan LaPaglia, it's Mr. Hennie who makes "Pioneer" worth watching--in a limited number of theaters, but also via video on demand and iTunes.

Credit: By Joe Morgenstern

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630029056

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630029056?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Nigeria Cuts Budgeted Oil Price; Move Suggests Spending Cuts by the Government

Author: Cox, Josie; Akingbule, Gbenga

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.

ProQuest document link

Abstract:

While [we] believe that oil will recover in 2015 when the [Organization of the Petroleum Exporting Countries] eventually cuts production, the Nigerian government needs to be prudent in managing its economy.

Links: 360 Link to Full Text

Full text:

Nigeria's finance ministry proposed a lower benchmark for the budgeted oil price, suggesting spending cuts after the commodity's relentless slide in recent weeks.

Paul Nwabuikwu, a spokesman for the Ministry of Finance, said on Thursday that Africa's biggest crude producer is now budgeting for an oil price of $65 per barrel, compared with the previous estimate of $73.

"In view of the present realities, we have readjusted," he said. "We hope to cut down extensively on our recurrent expenditure in the 2015 budget."

Oil and natural gas make up almost all of Nigeria's exports and 80% of government revenue, according to the International Monetary Fund. So, as Brent crude prices have slipped almost 40% since June to just under $70 a barrel, the wheels have begun to come off Nigeria's economy.

"The Nigerian government is catching up with the reality of where oil prices are today, said Nitesh Shah, an analyst at ETF Securities in London. "That means that budget outlays will have to be compressed. While [we] believe that oil will recover in 2015 when the [Organization of the Petroleum Exporting Countries] eventually cuts production, the Nigerian government needs to be prudent in managing its economy. That means budgeting for lower prices," he added.

Nigeria, whose economy surpassed South Africa in April as the continent's largest, has striven to generate revenue beyond oil. Recent years saw promising growth in telecommunications, banks, hotels and other service businesses. But to sustain that growth, businesses say they need bigger ports, more highways and fewer blackouts that crimp factory production and curb tax revenue. A weaker naira will make it more expensive to build that infrastructure.

The this week, according to traders, marking a record low. In the past few days, the currency has recovered somewhat, with traders saying the central bank has likely intervened and sold U.S. dollars. It is still down more than 12% against the dollar this year.

The Nigerian all-share stock index was down 0.2% on Thursday and has fallen more than 16% year-to-date.

Write to Josie Cox at

Corrections & Amplifications

Credit: Josie Cox, Gbenga Akingbule

Subject: Petroleum industry; Energy economics; Budgeting; Crude oil prices

Location: Africa Nigeria

Company / organization: Name: ETF Securities Ltd; NAICS: 523920; Name: International Monetary Fund--IMF; NAICS: 522298

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 4, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633993844

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633993844?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

'Peak Oil' Debunked, Again; The world relearns that supply responds to necessity and price.

Author: Anonymous

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.

ProQuest document link

Abstract:

By some estimates, the price of oil needs to be as high as $90 a barrel for oil extracted from "tight" deposits such as shale, though oil market research firm IHS believes most tight oil wells have a break-even cost of between $50 and $69 dollars a barrel.

Links: 360 Link to Full Text

Full text:

It has been 216 years since Thomas Malthus gave birth to the idea that mankind's appetite for natural resources would outstrip nature's capacity to supply them. There have since been regular warnings that the world is running out of,,,, you name it--and that population growth has become unsustainable.

The warnings create a political or social panic for a while, only to be proved wrong.

The latest reckoning with reality is the end of the obsession with "peak oil," which for years had serious people proclaiming that we were entering an era of permanent fossil fuels scarcity. It didn't work out that way.

That's a central lesson from this year's dramatic fall in the price of oil, which reached $69.49 a barrel of Brent crude on Thursday from a June high of $112.12. As recently as early November, when oil hovered at $80, OPEC officials warned they would intervene to hold the price at $70. But Saudi officials conspicuously refused to support an output cut at last week's OPEC meeting, and Saudi oil minister Ali al-Naimi has made clear that he'd be comfortable with lower prices.

The short-term Saudi calculation is to drive oil prices down to squeeze their geopolitical adversaries and higher-cost producers. That goes especially for their adversaries across the Persian Gulf in Iran, which depends on oil exports for over 40% of its revenues, and where the regime had designed its budget based on $100 oil.

The Saudis also hope to slow the explosive growth of U.S. production, which, thanks to the tapping of domestic shale resources through the combination of horizontal drilling and hydraulic fracturing, has risen to some nine million barrels a day from five million in 2008. By some estimates, the price of oil needs to be as high as $90 a barrel for oil extracted from "tight" deposits such as shale, though oil market research firm IHS believes most tight oil wells have a break-even cost of between $50 and $69 dollars a barrel.

But even if the Saudi move slows U.S. drilling, the International Energy Agency forecasts that U.S. production will still surpass Saudi Arabia's output of 9.7 million barrels a day, and overtake Russia's 10.3 million, perhaps sometime next year. This would make America the world's largest oil producer, which it was from the dawn of the oil age through 1974. Thanks to the fracking boom, the U.S. surpassed Russia as the world's largest natural-gas producer in 2013.

All this is a useful reminder, as IHS's Daniel Yergin told us the other day, that "technology responds to need and to price." It was the same story in the 1970s, when the world responded to OPEC's embargoes by exploiting new resources in Alaska and the North Sea, and again in the 1980s and 1990s, when offshore drilling became technologically feasible and economically profitable at ever-greater depths. And expect more from where that came, as the frackers continue to figure out how to drive down costs, and if new shale deposits in places such as Mexico, Ukraine and Argentina start to be exploited.

Also worth remembering is how spectacularly wrong some recent predictions of doom turned out to be. This is shooting fish in a barrel, but here is Paul Krugman in, declaring that "peak oil has arrived."

"What the commodity markets are telling us," Mr. Krugman averred, "is that we're living in a finite world, in which the rapid growth of emerging economies is placing pressure on limited supplies of raw materials, pushing up their prices. And America is, for the most part, just a bystander in this story." Far from being a bystander, America has been the main oil-market innovator.

Such doomsaying is that much more embarrassing because warnings of peak oil are nearly as old as the oil industry. In his book "The Quest," Mr. Yergin records that in 1885 the state geologist of Pennsylvania warned that "the amazing exhibition of oil" was "a temporary and vanishing phenomenon--one which young men will live to see come to its natural end."

Given this 130-year record of predictive failure, why does the end-of-oil myth persist? Part of it is that peak oil is more wish than prediction--a desire to see the end of fossil fuels to serve a larger political agenda. It is also a way of scaring governments into pouring money into alternative energy sources that can't compete with oil and natural gas without subsidies and mandates. Predicting disaster can also be a profitable business and a path to speech-making celebrity.

The happy ending is that the notion that the world is running out of resources always fails because the ingenuity of entrepreneurs, spurred by necessity and incentive, always exceeds the imagination of doomsayers. So we are learning again, and let's hope memories will be longer this time.

Subject: Petroleum industry; Supply & demand; Prices; Hydraulic fracturing

Location: United States--US

People: Malthus, Thomas (1766-1834)

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: International Energy Agency; NAICS: 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 5, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630057183

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630057183?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Buyout Shops Caught in Crude Exposure; Energy-Focused Private-Equity Firms' Investments Decline as Oil Prices Sink

Author: Dezember, Ryan

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.

ProQuest document link

Abstract:

With oil prices down more than a third since June, private-equity investors have seen at least $12.3 billion of value erased from their holdings, based on share moves in nine exploration and production companies representing many of buyout firms' biggest publicly traded energy positions. Oil- and stock-price declines, they said, create buying opportunities, with energy producers looking to bridge cash shortfalls by selling assets and bank financing for drilling more difficult to come by.

Links: 360 Link to Full Text

Full text:

For years, private-equity firms gushed into oil investments. Now, some of their profits are slipping away.

Among the investors hard hit: Warburg Pincus LLC, whose Antero Resources Corp. and Laredo Petroleum Corp. investments are down roughly 33% and 70%, respectively, since June, and Apollo Global Management LLC, the largest shareholder in EP Energy Inc., which has declined about 60% in the same period. SandRidge Energy Inc. shares owned by Riverstone Holdings LLC and Carlyle Group LP are off about 67% since June.

Private energy investments also are generating pain for buyout firms, as those assets' values are often judged based on similar publicly traded companies and assets. Falling oil prices crimp cash flow, KKR & Co.-owned Samson Resources Corp. has said. The Tulsa, Okla., energy producer has struggled with slumping natural-gas prices since KKR led a $7.2 billion leveraged buyout in 2011. KKR has since marked down its investment by more than half.

The downdraft in oil could take a bite out of coming earnings of some publicly traded private-equity firms, such as KKR and Apollo, as it did in the last quarter amid oil's decline. Apollo owns about 23% of EP Energy's shares, making EP one of the firm's largest stock positions. A less-severe decline in EP's shares through the end of September was a major contributor to a 2% decline in the value of Apollo's private-equity funds during the third quarter. Apollo executives pointed to its stake, which has lost about $775 million of value since June, when talking about pressure on the firm's results.

To be sure, many of these firms recently raised large, new energy funds, and their appetite for deals remains strong, said executives, who express confidence prices will eventually rebound to make investments worthwhile. Oil- and stock-price declines, they said, create buying opportunities, with energy producers looking to bridge cash shortfalls by selling assets and bank financing for drilling more difficult to come by.

"There are more sellers than buyers in energy to begin with. Now with the drop in oil prices, you're going to have companies that are highly levered that will become, in essence, forced sellers," Apollo co-founder Josh Harris said. "Our perspective is that there will be a long-run buying opportunity."

Apollo has been among the more aggressive buyers this year, pumping billions of dollars into oil and gas ventures from Mississippi to Alaska. Last month, Apollo committed more cash to a company that buys stakes in oil and gas wells.

And many debt-laden private-equity investments in energy included financial hedges to lock in prices and guarantee enough cash to handle the debt.

The recent infusion of private cash into the oil patch follows a page from the firms' playbooks. The last time oil prices were this low, five years ago during the depths of the recession, financing for drilling had all but dried up.

Private-equity firms were sitting on a mountain of money raised during the precrisis boom years and put cash behind wildcatters who were using new drilling technology to unlock troves of oil and gas across the U.S. Some of the investments made during the nascent shale-drilling boom turned out to be among firms' all-time best.

KKR turned $312 million into $1.5 billion in about a year helping East Resources Inc. unearth natural gas in Pennsylvania. Warburg Pincus and two smaller firms invested about $1.5 billion in Antero, and have at times been up as much as $12 billion on the company they launched.

Before oil prices began their plunge this summer, energy-focused private-equity funds had outperformed general private-equity funds over the past decade, returning about 16.5% annually, after fees, compared with 14% for the general funds, according to Cambridge Associates LLC. The big returns prompted private-equity investors to double down on drilling.

Nearly $100 billion has been pumped into energy funds since 2011, according to data provider Preqin.

For most of the year, private-equity firms ran into each other in auctions bidding up prices for drilling properties that big oil companies sold. Through mid-October, private-equity firms had been the buyers of roughly a third of the $54 billion of U.S. onshore oil and gas fields, according to RBC Richardson Barr, a Houston unit of Royal Bank of Canada. As oil's slide steepened, the deal market slowed, though.

Private-equity firms sized up California oil fields that Freeport-McMoRan Inc. shopped recently, according to people familiar with the matter. Some of the suitors gave up pursuit of the properties valued at $5 billion because they were unable to borrow enough of the purchase price to earn the profits they were after, the people familiar with the matter said.

As for done deals, private-equity firms often have some protection.

Even as they were downgrading Laredo's stock to "neutral" from "overweight," Simmons & Co. International analysts last month said the Tulsa, Okla., company "has a number of things working for it," including the $88 dollars a barrel it will get for most of the oil it pumps next year. Laredo has hedged about 85% of its expected output in 2015, which is well above the 35% average for other energy producers it studies, the investment bank said.

Warburg and its investors, which spent about $600 million launching Laredo, have already pocketed about $1 billion from the investment, so proceeds from any shares the firm still owns is gravy.

EP Energy, which has also hedged much of its near-term output, is basically a break-even deal for Apollo at the current share price, down from about double the firm's money when it sold shares in its January initial public offering. "We feel good about the long-term prospects of that investment," said Mr. Harris, the Apollo co-founder.

And despite Antero's recent slide, which has lopped about $4 billion since June off the shares still held by Warburg and partners Trilantic Capital Partners and Yorktown Energy Partners, the investment firms have already pocketed about $1 billion on their roughly $1.5 billion investment in the Denver company.

Write to Ryan Dezember at

Credit: By Ryan Dezember

Subject: Private equity; Acquisitions & mergers; Prices; Natural gas; Equity funds

Location: California

Company / organization: Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920; Name: SandRidge Energy Inc; NAICS: 211111; Name: Laredo Petroleum Inc; NAICS: 211111; Name: Antero Resources Corp; NAICS: 221112; Name: Apollo Global Management LLC; NAICS: 523920; Name: Warburg Pincus LLC; NAICS: 523910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 5, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630057259

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630057259?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Will Cheap Oil Lead to Big Mergers? Price Collapses Often Serve as the Trigger for Consolidation in Energy

Author: Scheck, Justin; Shayndi Raice

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.

ProQuest document link

Abstract:

"Opportunism does play a part but it can't be the driver." Since many small oil companies still need cash, and large ones need resources to replenish their reserves, "you'd be more likely to see bits and pieces getting sold," another banker said.

Links: 360 Link to Full Text

Full text:

When oil prices hit a trough, history points to a likely energy industry response: mergers and acquisitions.

Price crashes in the early 1980s and late 1990s sparked a rash of deal-making that reshaped the industry. A decline in the mid-2000s led the giant firms to pick up smaller companies. Now, with oil's price down 40% since June, bankers and investors are hoping for a repeat.

Traders are betting on it: BP PLC shares jumped by close to 5% Tuesday after an anonymous Twitter user claimed rival Royal Dutch Shell PLC was going to make a bid. Spokesmen for BP and Shell declined to comment

The oil-field services industry, which suffers when low prices reduce oil-company spending, have produced the first big deals this year with their clients cutting spending on production. Last month, the second-largest oil-field servicer, Halliburton Co., bid about $35 billion to acquire No. 3 Baker Hughes Inc. France's Technip SA also bid for a smaller services firm last month, offering $1.83 billion to buy Paris-based CGG SA.

Pascal Menges, a Lombard Odier manager whose funds hold shares of shale-focused U.S. energy companies, said he expects to see an uptick in acquisitions and asset sales if low oil prices continue. Low prices, he said, could put some small and medium-size companies into a "distressed situation" that forces them to either unload property to raise cash or sell out completely.

Past consolidations took place after a prolonged slump in crude prices and often during a period of weak energy-stock market valuations. In contrast, this year's crude price decline has lasted about six months.

Brent, the global oil benchmark, slipped to a four-year low Thursday after Saudi Arabia cut the price of its oil in the U.S. The price fell 28 cent to $69.64 a barrel on ICE Futures Europe.

Big deals among oil producers may be harder now than in the past because there are fewer large companies left, said Oppenheimer & Co. analyst Fadel Gheit.

The deep price drop of the late 1990s led to the consolidation of the so-called supermajors, the handful of huge, integrated oil-producing and refining companies that operate around the world. BP acquired Amoco and Arco, Exxon bought Mobil, and Chevron Corp. snared Texaco. That left the industry with about half-dozen big integrated players and a flock of much smaller companies that live and die on finding and producing new resources.

Since then, much of the industry's merger activity has involved big companies buying smaller companies to gain access to new energy sources, or in some cases companies shedding exploration assets or businesses that drag on profits. Shell, for example, has sold oil fields in Nigeria, while U.S.-based Hess Corp. has gotten rid of assets related to refining.

Overall, oil and gas deals have slowed over the past few years, according to data from researcher Dealogic, as big oil companies have come under pressure to reduce spending. The $242 billion in deals globally in 2013 was the lowest since 2009, Dealogic said. This year activity is up with nearly $300 billion in announced deals so far.

Now, London investment bankers--who handle a large portion of global oil transactions--say such deals are likely to pick up again. Dropping oil prices have slashed the value of smaller exploration and production companies, giving some a market capitalization less than the value of their assets. London-based Ophir Energy PLC, for example, has a market value of about $1.25 billion, less than the $1.49 billion in its cash holdings at the end of June.

Some of those companies see deals as a way to survive the downturn. Ophir agreed last month to buy rival Salamander Energy PLC for less than $500 million. An Ophir spokeswoman said the deal hasn't closed yet.

When it comes to bigger mergers, bankers say, companies must first decide the market is predictable enough to start making long-term decisions. buyers want to see if prices keep falling before committing, while sellers are trying to avoid selling when the market is at a low.

Viswas Raghavan, head of investment banking for Europe, the Middle East and Africa at J.P. Morgan Chase & Co., said there hasn't been a lot of deals in the energy sector yet because "a lot of these developments have happened very quickly." He added, "If you're in that sector, you're caught in the same valuation downdraft."

Mr. Raghavan said he expects deals between companies that have real synergies. "Opportunism does play a part but it can't be the driver."

Since many small oil companies still need cash, and large ones need resources to replenish their reserves, "you'd be more likely to see bits and pieces getting sold," another banker said. For example, India's ONGC Videsh Ltd. has been talking to Tullow Oil PLC about buying some assets.

Energy bankers said it is still possible to see a return of the megamerger. Even after the last wave of giant deals a decade and a half ago, Shell talked internally and with bankers about merging with BP and BG Group PLC, said people involved in those talks. Such big deals are complicated, but also offer the most potential upside, said Oppenheimer's Mr. Gheit, because of potentially huge economies of scale.

Several bankers say BG, which owns stakes in oil and gas fields from Brazil to the North Sea, could be a target for a large company looking to make get larger. BG, valued at around $50 billion, is about one-eighth the size of ExxonMobil but far larger than most exploration and production companies. Its shares are currently trading at their lowest level for five years.

But the company recently hired a new chief executive and buying the company outright would still be a large deal for any would-be acquirer. BG said it doesn't comment on market speculation.

Write to Justin Scheck at and Shayndi Raice at

Credit: By Justin Scheck and Shayndi Raice

Subject: Acquisitions & mergers; Petroleum industry; Investments; Small business; Crude oil prices

Location: United States--US

Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Hess Corp; NAICS: 447110, 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Technip SA; NAICS: 541330; Name: Halliburton Co; NAICS: 213112, 237990

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 5, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630088617

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630088617?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Global Finance: Buyout Shops Caught in Crude Exposure --- Energy-Focused Private-Equity Firms' Investments Decline as Oil Prices Sink; Bulls See 'Long-Run Buying Opportunity'

Author: Dezember, Ryan

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Dec 2014: C.3.

ProQuest document link

Abstract:

Oil- and stock-price declines, they said, create buying opportunities, with energy producers looking to bridge cash shortfalls by selling assets and bank financing for drilling more difficult to come by.

Links: 360 Link to Full Text

Full text:

For years, private-equity firms gushed into oil investments. Now, some of their profits are slipping away.

Apollo executives pointed to its stake, which has lost about $775 million of value since June, when talking about pressure on the firm's results.

Apollo has been among the more aggressive buyers this year, pumping billions of dollars into oil and gas ventures from Mississippi to Alaska.

And many debt-laden private-equity investments in energy included financial hedges to lock in prices and guarantee enough cash to handle the debt.

The recent infusion of private cash into the oil patch follows a page from the firms' playbooks.

The last time oil prices were this low, five years ago during the depths of the recession, financing for drilling had all but dried up.

The big returns prompted private-equity investors to double down on drilling.

Nearly $100 billion has been pumped into energy funds since 2011, according to data provider Preqin.

For most of the year, private-equity firms ran into each other in auctions bidding up prices for drilling properties that big oil companies sold.

Through mid-October, private-equity firms had been the buyers of roughly a third of the $54 billion of U.S. onshore oil and gas fields, according to RBC Richardson Barr, a Houston unit of Royal Bank of Canada. As oil's slide steepened, the deal market slowed, though.

Credit: By Ryan Dezember

Subject: Acquisitions & mergers; Prices; Natural gas; Equity funds; Private equity

Classification: 9180: International; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.3

Publication year: 2014

Publication date: Dec 5, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630151693

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630151693?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Will Cheap Oil Lead to a New Merger Wave? --- Crude Price Drops That Linger Historically Trigger an Energy Industry Consolidation; Why This Time May Be Different

Author: Scheck, Justin; Shayndi Raice

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Dec 2014: B.1.

ProQuest document link

Abstract:

Last month, the second-largest oil-field servicer, Halliburton Co., bid about $35 billion to acquire No. 3 Baker Hughes Inc. France's Technip SA bid for a smaller services firm last month, offering $1.83 billion to buy Paris-basedCGG SA. Pascal Menges, a Lombard Odier manager whose funds hold shares of shale-focused U.S. energy companies, said he expects to see an uptick in acquisitions and asset sales if low oil prices continue.

Links: 360 Link to Full Text

Full text:

Corrections & Amplifications

Viswas Raghavan is head of banking for Europe, the Middle East and Africa at J.P. Morgan Chase & Co. A Marketplace article Friday about prospects for oil-industry mergers and acquisitions incorrectly gave his title as head of investment banking for that region.

(WSJ Dec. 6, 2014)

When oil prices hit a trough, history points to a likely energy industry response: mergers and acquisitions.

The oil-field services industry, which suffers when low prices reduce oil-company spending, have produced the first big deals this year. Last month, the second-largest oil-field servicer, Halliburton Co., bid about $35 billion to acquire No. 3 Baker Hughes Inc. France's Technip SA bid for a smaller services firm last month, offering $1.83 billion to buy Paris-basedCGG SA.

Pascal Menges, a Lombard Odier manager whose funds hold shares of shale-focused U.S. energy companies, said he expects to see an uptick in acquisitions and asset sales if low oil prices continue. Low prices, he said, could put some small and medium-size companies into a "distressed situation" that forces them to unload property to raise cash or sell out completely.

Brent, the global oil benchmark, slipped to a four-year low Thursday after Saudi Arabia cut the price of its oil in the U.S. The price fell 28 cent to $69.64 a barrel on ICE Futures Europe.

Big deals among oil producers may be harder now than in the past because there are fewer largecompanies left, said Oppenheimer & Co. analyst Fadel Gheit.

Now, London investment bankers -- who handle a large portion of global oil transactions -- say such deals are likely to pick up again. Dropping oil prices have slashed the value of smaller exploration and production companies, giving some a market capitalization less than the value of their assets. London-based Ophir Energy PLC, for example, has a market value of about $1.25 billion, less than the $1.49 billion in its cash holdings at the end of June.

Mr. Raghavan said he expects deals between companies that have real synergies. "Opportunism does play a part but it can't be the driver."

Energy bankers said it is still possible to see a return of the megamerger. Shell talked internally and with bankers about merging with BP and BG Group PLC, said people involved in those talks. Such deals are complicated, but also offer the most potential upside, said Oppenheimer's Mr. Gheit, because of potentially economies of scale.

Several bankers say BG, which owns stakes in oil and gas fields from Brazil to the North Sea, could be a target for a large company. BG, valued at around $50 billion, is about one-eighth the size of ExxonMobil. Its shares are currently trading at their lowest level for five years.

But the company recently hired a new chief executive. BG said it doesn't comment on market speculation.

Credit: By Justin Scheck and Shayndi Raice

Subject: Acquisitions & mergers; Petroleum industry; Investments; Small business; Crude oil prices

Location: Europe United States--US Africa Middle East

Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Technip SA; NAICS: 541330; Name: Halliburton Co; NAICS: 213112, 237990

Classification: 9190: United States; 3400: Investment analysis & personal finance; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.1

Publication year: 2014

Publication date: Dec 5, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630226610

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630226610?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Energy Markets: Saudi Arabia Cuts Oil Prices for U.S., Asia --- Market Watchers See Kingdom's Discount as Bid to Keep Market Share; 'A Declaration of War to U.S. Shale-Oil Producers'

Author: Said, Summer

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Dec 2014: C.4.

ProQuest document link

Abstract:

People familiar with the matter said Riyadh argued that the group would lose market share to non-OPEC producers, including U.S. shale-oil producers, if it cut output.

Links: 360 Link to Full Text

Full text:

The move comes a week after Riyadh persuaded fellow members of the Organization of the Oil Exporting Countries to maintain the group's production target, instead of reining in output significantly to support prices.

Brent crude, the global benchmark, slid 0.4% to $69.64 a barrel on the news, reversing earlier gains. That is the lowest level since May 2010 and brings Brent's year-to-date decline to 37%. U.S. crude-oil prices dropped 0.8% to $66.81 a barrel, but remained above the more than five-year low hit Nov. 28.

State-owned Saudi Arabian Oil Co., known as Saudi Aramco, said Thursday that it had reduced its official selling prices for all oil grades bound for Asia in January by between $1.50 and $1.90 a barrel, compared with December. It dropped prices for all crude grades to the U.S. by between 10 cents and 90 cents a barrel.

Thursday's discounts to Asia "would herald in a new round in the battle for market shares," said Carsten Fritsch, an analyst at Commerzbank. He said the U.S. discounts were "tantamount to a declaration of war to U.S. shale-oil producers," given the steep fall already in U.S. benchmark prices.

Aramco, however, raised prices for all crude grades to northwest Europe and Mediterranean destinations by between 20 cents and 50 cents a barrel compared with the December prices.

But in recent months, amid a steep drop in global crude prices, the settings have been closely followed by market watchers looking for signs about Saudi oil policy.

Saudi Arabia, the biggest OPEC producer by far, and its Gulf allies pushed the group at its Nov. 27 meeting to keep its production target unchanged. People familiar with the matter said Riyadh argued that the group would lose market share to non-OPEC producers, including U.S. shale-oil producers, if it cut output. Aramco also lowered its U.S. pricing last month, a move executives familiar with the matter said at the time was aimed at holding on to market share.

The Wall Street Journal reported Wednesday that the kingdom now believes oil prices could stabilize at around $60 a barrel, a level both it and other Gulf producers believe they could withstand. The shift in Saudi thinking suggests the country won't push for supply cuts in the near term, even if oil prices fall further.

Kuwait's deputy finance minister, Khalifa Hamada, said Thursday the country was likely to base its 2014-2015 budget on a price of $55 to $60 a barrel.

Credit: By Summer Said

Subject: Petroleum industry; Crude oil; Commodity prices

Classification: 9190: United States; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.4

Publication year: 2014

Publication date: Dec 5, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630226691

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630226691?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

World News: Top Europe Bank Holds Fire on New Action --- ECB's Draghi Opens Door to Bolder Stimulus but Defers Decision Until Early 2015; Falling Oil Prices Pose Fresh Wrinkle

Author: Blackstone, Brian

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Dec 2014: A.8.

ProQuest document link

Abstract:

When interest rates are near zero, as is the case with the ECB and other large central banks, the main lever to stimulate the economy is through purchases of assets with newly created money that increase the size of a central bank's balance sheet and reduce borrowing costs for governments and the private sector.

Links: 360 Link to Full Text

Full text:

FRANKFURT -- The European Central Bank opened the door to a dramatic escalation in its campaign to stimulate the eurozone's stagnant economy, but deferred any moves until early 2015 amid signs of continuing divisions over the right course of action.

ECB President Mario Draghi said Thursday that officials discussed purchases of government bonds, otherwise known as quantitative easing, a move that would mark a new chapter in the bank's fight against excessively weak inflation. But he added they needed more time to gauge the effects of policies that they had already implemented while assessing how falling oil prices might affect the region's already weak consumer prices.

"We discussed the possibility of doing QE" with buying government bonds "as one option," Mr. Draghi said after the ECB left its key interest rates unchanged at record lows at the bank's monthly meeting. The ECB will reassess its policies early next year and decide whether it needs to do more, Mr. Draghi said, raising expectations that the ECB could act as soon as its next policy meeting on Jan. 22, although he didn't commit to a time frame.

"Early means early. It doesn't mean at the next meeting," Mr. Draghi said.

Financial markets reacted negatively, as investors had hoped for a more ironclad commitment to begin large-scale bond purchases, a policy that has been used extensively by central banks in the U.S., the U.K. and Japan. European and U.S. stocks fell, and the euro rose on Mr. Draghi's comments.

"They're almost there but not quite over the line," said Ken Wattret, economist at BNP Paribas. "The pieces of the jigsaw are falling into place."

The ECB opted against immediate action despite an annual inflation rate of 0.3% in the eurozone in November, far below the central bank's target of just under 2%. The ECB lowered its 2015 forecast for consumer-price growth to 0.7% from 1.1% and in 2016 from 1.4% to 1.3%. The inflation forecasts didn't fully incorporate the most recent drop in oil prices, which could push inflation even lower.

"On the basis of their projections, any other central bank would have announced a policy change," Mr. Wattret said.

Mr. Draghi's remarks contained a number of hints that more central-bank stimulus may be coming to Europe soon. He said the ECB would be "particularly vigilant" about the effect the sharp reduction in oil prices could have on consumer prices and expectations for future inflation, using a phrase that his predecessor, Jean-Claude Trichet, often deployed to signal imminent ECB action.

Mr. Draghi said the bank intended to raise the size of its balance sheet to early 2012 levels, implying a rise of around 1 trillion euros ($1.24 trillion). That was a firmer objective than in November, when the bank said it expected its current policies -- which include cheap, four-year loans to banks and purchases of covered bank bonds and asset-backed securities -- to achieve this rise.

But the small shift in language was met with resistance within the ECB's 24-member governing council. Mr. Draghi said a vast majority approved the change to the balance-sheet language, signaling some opposition.

Jens Weidmann, the head of Germany's powerful central bank, was among the dissenters, a person familiar with the matter said, because he didn't want the ECB to commit prematurely to full-blown quantitative easing. The other German member of the governing council, executive board member Sabine Lautenschlager, has signaled resistance to buying government bonds. Quantitative easing is unpopular in Germany, Europe's largest economy, where the policy fuels deep-rooted fears of inflation and the use of central-bank money to finance wasteful government spending.

Mr. Draghi suggested that the ECB would move even in the face of German opposition if the ECB's inflation target was at risk. "We don't need unanimity" to launch quantitative easing, he said, adding that he was confident a program could be designed to achieve a consensus within the ECB, if needed. The ECB could also purchase other private-sector assets, he said, saying officials have discussed all types of assets except gold.

Despite the negative reaction in financial markets, which may have grown overly optimistic about imminent ECB moves, the prospects for large-scale government bond purchases increasingly appear to be a question of when rather than if.

Quantitative easing also typically weakens the exchange rate, boosting exports and inflation. Mr. Draghi said the policy was shown to be effective in the U.S. and U.K., although it is a tougher call for Japan, given other challenges that economy faces.

His comments underscore the divergent paths of major central banks as their economies recover at different speeds. The U.S. Federal Reserve and the Bank of England are expected to start raising interest rates next year as their economies see faster, jobs-rich recoveries than in the eurozone. In contrast, Japan and the ECB are ramping up their stimulus drives.

Credit: By Brian Blackstone

Subject: Central banks; Monetary policy; Banking; Meetings; Consumer Price Index; Eurozone

Location: United States--US

Company / organization: Name: BNP Paribas; NAICS: 522110; Name: European Central Bank; NAICS: 521110

Classification: 9175: Western Europe; 1120: Economic policy & planning

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.8

Publication year: 2014

Publication date: Dec 5, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630226908

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630226908?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Slide as High Supplies Weigh; Low Demand Elsewhere Damps Expectations of Boost From Positive U.S. Employment Data

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.

ProQuest document link

Abstract:

NEW YORK--Oil prices pared losses Friday on better-than-expected U.S. employment data but held lower as worries about a global glut of oil continued to weigh on the market.

Links: 360 Link to Full Text

Full text:

NEW YORK--Oil prices slid to the lowest point in more than five years Friday as worries about a global glut of oil continued to weigh on the market.

Light, sweet crude oil for January delivery skidded 97 cents, or 1.5%, to $65.84 a barrel on the New York Mercantile Exchange, the lowest settlement since July 29, 2009. Prices fell 0.5% this week and have dropped nine of the past 10 weeks.

Brent, the global benchmark, fell 57 cents, or 0.8%, to $69.07 a barrel on ICE Futures Europe, the lowest level since Oct. 7, 2009. Brent lost 1.5% on the week.

Oil futures have plunged in recent months as strong supply growth has outpaced moderate demand.

Saudi Arabia on Thursday lowered the price for its oil in the U.S., indicating that the country is focused on maintaining its market share in a low-price environment rather than cutting production to reduce the global surplus of crude.

"The Saudi Arabia news really caught people a little off-guard here," said Tariq Zahir, managing member of Tyche Capital Advisors.

Prices are likely to stay under pressure until traders see indications that supplies will drop as producers pull back on drilling or new investments, said Ed Kevelson, head of U.S. energy over-the-counter sales at brokerage Newedge USA, which is owned by Société Générale.

"The market's been searching for a true bottom," he said, but so far, "I don't think the price action that we're seeing implies a bottom."

Norway's Statoil ASA said Friday that it would idle three oil-drilling rigs for longer than previously planned.

The U.S. added a , the strongest month of hiring since January 2012, the Labor Department said Friday. Economists surveyed by The Wall Street Journal had expected a gain of 230,000.

Higher employment can lead to stronger demand for petroleum products, particularly gasoline, as more commuters drive to work.

"Confidence is going to build--more people are going to be out there using energy" in the U.S., said Carl Larry, director of oil and gas for Frost & Sullivan. However, he said, "oil prices keep going down because the rest of the world is not getting that kind of demand."

January reformulated gasoline blendstock, or RBOB, dropped 2.14 cents, or 1.2%, to $1.7734 a gallon, the lowest level since Oct. 9, 2009. Prices are down 3% on the week.

January diesel fell 0.99 cent, or 0.5%, to $2.1078 a gallon, the lowest settlement since Sept. 22, 2010. Prices fell 2.5% this week.

Kjetil Malkenes Hovland contributed to this article.

Write to Nicole Friedman at

Credit: By Nicole Friedman

Subject: Supply & demand; Petroleum industry; Prices

Location: United States--US

Company / organization: Name: Statoil ASA; NAICS: 324110, 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: Frost & Sullivan; NAICS: 541910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 5, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1630382210

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630382210?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Small Oil Drillers Feel Brunt of Crude's Decline; Some Stocks Have Lost Half Their Market Value or More in the Past Month

Author: Strumpf, Dan

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.

ProQuest document link

Abstract:

In the years before 2014's oil-price crash, these and other companies sold bonds and took out loans to fuel rapid growth in new and often costly fields across the U.S. That borrowing was easier to stomach when oil prices were $100 a barrel, but with U.S. crude down 39% in nearly six months, investors fear that some firms face slowing growth rates, reduced profits or a potential cash crunch. The 10 worst-performing energy companies in the Russell 3000 index over the past month have an average debt load that is four times their market value, compared with an average debt-to-equity ratio of 1.2 for the energy sector, according to data compiled by Michael O'Rourke, chief market strategist at JonesTrading.

Links: 360 Link to Full Text

Full text:

The selloff in crude prices has bruised energy companies big and small, but none have felt the pain worse than the nation's heavily indebted oil drillers.

Shares of small, North America-based oil and gas producers that loaded up on debt during times of high oil prices have plunged in the past month, in some cases losing half their market value or more.

Shares of Goodrich Petroleum Corp. have plunged 87% from their peak in June and 49% in the past month. Energy XXI Ltd.'s stock is down 51% in a month. Halcon Resources Corp. has fallen 36% in that time.

On Friday, U.S. oil prices fell to a more than five-year low. The front-month oil contract lost 97 cents, or 1.5%, to settle at $65.84 a barrel on the New York Mercantile Exchange, exerting further downward pressure on many oil-company shares.

Some investors are holding on to the shares of smaller and indebted drillers, reluctant to sell with prices so low. Others are paring back exposure, unwilling to ride out the volatility amid a global oil-supply glut that shows few signs of abating.

"The earnings are going to go down, the revenues are going to go down and in some cases there will be concerns about liquidity," said Eric Green, a portfolio manager who helps manage $3 billion in equity investments at Penn Capital Management.

Mr. Green owns a number of shares of smaller energy producers. He said he is hanging on, betting oil prices will rebound

Investors said crude prices could return to more lofty levels if a geopolitical shock erupts or global growth picks up.

Energy companies have issued a flurry of debt to finance the yearslong boom in domestic oil and gas production. The 10 worst-performing energy companies in the Russell 3000 index over the past month have an average debt load that is four times their market value, compared with an average debt-to-equity ratio of 1.2 for the energy sector, according to data compiled by Michael O'Rourke, chief market strategist at JonesTrading.

"If you look at the last couple of years, there's a number of insane junk deals that a lot of these energy companies have done," said Bill Bell, a portfolio manager on the Atlanta Capital SMID-Cap fund, which holds $5.9 billion of small and midsize companies. Junk bonds, those rated below investment grade, are issued by companies with relatively low credit ratings. Mr. Bell said his fund has reduced its holdings of energy stocks over the past year, from about 4% to less than 2%.

Goodrich Petroleum, which drills for oil in higher-cost fields in Louisiana and Mississippi has a debt load of more than three times its stock-market value. Shares ran up as much as 74% this year to trade as high as $29.60 in June, when U.S. oil hit a high for the year at $107.26 a barrel. On Friday, the stock closed at $3.71, down 5.1% on the day. The company didn't respond to a request for comment.

Energy XXI, which operates in the Gulf of Mexico area, has a debt load that is more than 11 times its market value. Shale producer Halcon Resources has a debt-to-equity ratio of more than 4 to 1.

An Energy XXI spokesman said the company has hedged to protect against low oil prices through 2015, and "we're starting to work on our 2016 hedges as we speak." Halcon didn't respond to a request for comment.

Rafaelina Lee, a portfolio manager who helps oversee about $800 million of small and midsize stocks for Deutsche Asset & Wealth Management, said she has curbed her holdings of companies producing in more costly locations.

"Some smaller-cap names don't have as clean balance sheets," she said. "In these times of high uncertainty, a clean balance sheet is definitely required, as well as disciplined management."

Investors said the outlook for energy producers depends largely on the direction of oil prices. U.S. crude output is expected to increase next year despite falling prices, which means a return to $100 oil is unlikely soon.

Charles DyReyes, an analyst who focuses on energy stocks at Brandywine Global Investment Management, is combing through some battered shares of smaller energy firms. He said he expects oil prices to rebound in the coming year, possibly to $80 a barrel, an economical level for many producers. "I don't need oil at $100 to make money here," Mr. DyReyes said.

Write to Dan Strumpf at

Credit: By Dan Strumpf

Subject: Petroleum industry; Investment advisors; Debt restructuring; Junk bonds; Crude oil prices

Location: United States--US

Company / organization: Name: Goodrich Petroleum Corp; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: Halcon Resources Corp; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 5, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1631221227

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1631221227?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Mexico Mulls Curtailing Energy Bids Amid Falling Prices; Recent Plunge in Oil Prices Is Prompting Mexico's Government to Rethink Its Oil and Gas Industry Reopening

Author: Iliff, Laurence

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

MEXICO CITY--The recent plunge in oil prices is prompting Mexico's government to consider scaling back the initial bidding for its momentous plans to reopen its oil and gas industry to private companies, and to offer them better terms.

The government is now likely to delay or scale down tenders for some of the oil fields and areas that it planned to offer in the coming months, especially in areas with shale oil where recovery costs are higher than in traditional oil fields, energy minister Pedro Joaquín Coldwell said late on Thursday.

He said the auctions for deep-water fields were unlikely to change because they were longer-term investments, but that other fields with "nonconventional oil, shale gas and shale oil" were likely to be delayed or reduced in scope--including the Chincontepec field, a major onshore area with lots of oil stuck under nonporous rock.

Even before Mr. Coldwell's comments, the euphoria that greeted Mexico's moves to open its energy industry for the first time in 76 years had slowly given way to concerns that the first-round bids could be less lucrative for the government than it had expected.

Complicating matters, President Enrique Peña Nieto now faces a political crisis two years into his rule, amid public cries for government accountability in the disappearance of 43 students and allegations of favoritism in awarding government contracts.

The president's approval rating of about 40% is the lowest for a Mexican leader in nearly two decades, raising the question of whether the president has the political capital to sustain his reform agenda, analysts said.

"This really is a tsunami that is hitting right now, and clearly at the worst possible time," said John Padilla, managing director for oil consultancy IPD Latin America.

To be sure, Mr. Padilla and others believe that the fundamentals of the energy overhaul are solid and that oil prices could bounce back in time for the initial bids for 109 exploratory blocks and 60 production fields during the course of the year. Shallow-water fields are scheduled to go first, with blocks in deep Gulf waters likely dragging out until the end of 2015.

In addition to low oil prices, Mexico's regulators have been struggling with putting together a large bid round in a short period of time with vast new responsibilities and limited staff, analysts said.

"They're saying that it's all about oil prices, but it's also about recognizing that the amount of work involved in launching a bid round is tremendous and that could have factored into this as well," Mr. Padilla said.

Industry officials say lower oil prices won't turn off the major oil companies to one of the most exciting developments in the global oil and gas sector in recent memory, given Mexico's significant oil and gas reserves and huge unexplored offshore areas likely rich with resources. But the change in the price climate could make oil firms pickier about where they put their investments.

"I don't think there's any question that in an oil-price environment like we see now...where cash flows are down and the stress is a little bit higher on that side, it would be naive to say that won't have some impact on how the industry responds," said Marvin Odum, upstream Americas director for Royal Dutch Shellin an interview this week. Nonetheless, Mr. Odum said, deep-water areas remain attractive because they are long-term projects. "You really have to take a long-term view of where you think oil prices will be."

Gabriel Salinas, an energy lawyer at Mayer Brown in Houston, said the bid-round modification makes sense. "Leaving some areas out of one round and putting these areas into a future round is not a big concern. It's just economics."

The Energy Ministry and the National Hydrocarbons Commission are working to prepare "model contracts" that will set critical terms for the bid round that includes potential oil and gas resources in exploratory blocks of around 15 billion barrels of oil equivalent, and probable reserves of about 4 billion barrels in the oil fields set to be awarded.

The regulators missed the November deadline for those contracts and Mr. Coldwell said they could come out next week.

Write to Laurence Iliff at

Credit: By Laurence Iliff

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 5, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1631221235

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1631221235?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

An Ailing Venezuela Trims Oil Diplomacy; Caracas Slashes Shipments of Discounted Crude to Its Partners in the Caribbean and Central America Who Depend Heavily on the Subsidies

Author: Minaya, Ezequiel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

KINGSTON, Jamaica--Some Caribbean and Central American countries are bracing for cutbacks in shipments of cut-rate oil from Venezuela, as Caracas struggles with sliding crude prices and a spiraling economic crisis.

For a decade, the 13 beneficiaries of Venezuela's largess have depended deeply on the oil to finance social spending and infrastructure, and rewarded Caracas with diplomatic support on the international stage, regional diplomats said in interviews.

Even as Venezuela pledges to continue the program, the country's oil exports to the countries fell about 20% through October compared with the same period last year, says ClipperData LLC, a New York data tracker. And last year, Venezuela's cut-rate oil exports declined 15% from 2012, the International Monetary Fund says.

Several participants in the program, called Petrocaribe, are preparing for further declines, which diplomats said stand to upend spending plans and tip some economies into recession.

"If Petrocaribe pulls out of Jamaica I don't know how we are going to manage," said Verona Barrett-Brown, the principal of a Kingston-area primary school that displays the name of Venezuela's national oil company, Petróleos de Venezuela, or PdVSA, on the wall. "It will be a dark day."

In tiny Grenada, the discounted Venezuelan oil funds 40% of social programs, from textbooks and free lunches for children to paying for roads and buses. Haiti named an airport after Venezuela's late President Hugo Chávez, who founded Petrocaribe in 2005, and uses the oil money for food distribution programs and for monthly allowances for the poor. The Dominican Republic has used the program to plug a fiscal hole.

And here in Jamaica's capital, projects funded with Venezuelan oil have provided aid to small farmers and businesses, refurbished a zoo and replaced pit latrines in schools with flushing toilets.

But now, the IMF is warning regional governments "that the likelihood of disruption is more likely than it was because Venezuela is under greater pressure," said Adrienne Cheasty, deputy director of the IMF's Western Hemisphere unit.

Venezuelan oil prices have fallen about a third since this summer to $61 a barrel as of Wednesday, which Deutsche Bank says is half of what is needed to cover the central government's budget. With inflation soaring and Wall Street expressing concerns about a default, President Nicolás Maduro announced in a televised address on Dec. 3 that he would cut spending 20%.

Venezuelan officials have made no public mention of cutbacks to Petrocaribe or other oil-aid programs, such as the arrangement to ship 99,000 barrels a day to Cuba in exchange for doctors who work in Venezuelan slums. Venezuelan Foreign Minister Rafael Ramírez recently reiterated his government's "strong commitment to continue the Petrocaribe initiative, under any circumstances."

But a quiet shift is taking place.

Honduras and Guatemala are now inactive in the program after Caracas toughened the terms, diplomats said.

Other countries not within Petrocaribe, but which receive preferential oil deals from Venezuela, are also seeing oil shipments fall. Bolivia and Paraguay didn't receive any cut-rate oil shipments last year from Venezuela, while Argentina's share was halved, according to statistics from PdVSA.

"Every barrel of oil PdVSA sends to a Petrocaribe country under preferential terms is one less barrel from which Venezuela can immediately derive a higher, market-based price to support the embattled economy," said Cory Gill, an associate with the energy researcher Goldwyn Global Strategies who co-wrote a report on Petrocaribe for the Atlantic Council think tank in Washington.

The IMF calculates that Petrocaribe countries receive about 100,000 barrels a day from Venezuela. The lender says they will on average face a 1.6% hit to economic output if Venezuela turns off the oil tap, with highly dependent countries such as Haiti facing the most difficulty.

Brian Wynter, governor of Jamaica's central bank, said his government is adjusting. "We are being very cautious by using projections of what we will use from Petrocaribe that are much lower than what the facility allows," he said.

For years, Petrocaribe was mutually beneficial. Participating countries paid a fraction of market price upfront for oil, deferring the full cost through long-term loans with 25-year maturities and interest rates as low as 1%.

Some governments sold the oil at full price or simply earmarked savings from not having to buy fuel at market prices for programs and infrastructure. Venezuela was repaid in rice, chicken, beans, jeans and other products that Jorge Piñon, director of the Latin America and Caribbean Energy Program at the University of Texas at Austin, said were sold at artificially high prices.

The program has cost Venezuela $22.1 billion, with Petrocaribe countries accumulating more than $11 billion in debt through 2013, said Mr. Piñon, basing his calculations on PdVSA data.

In return, Venezuela got loyal allies that voted with Venezuela at the United Nations, the Organization of American States and at other regional bodies, diplomats and officials from four countries said.

In March, for instance, Venezuela's allies, including Petrocaribe countries, barred a prominent Venezuelan opposition leader's speech at the OAS from being broadcast publicly, the diplomats said.

"You don't provide oil to all these countries on such sweet terms and not expect support in the U.N. and OAS," said a high-ranking official from one Caribbean nation. "That's just the way it works. That's just realpolitik."

But Caribbean and Central American countries, long concerned over their high dependence on single crops, such as sugar, bananas and tobacco, or industries, such as tourism, are now worried about their addiction to inexpensive Venezuelan oil.

"There is agreement among us that we don't want to be too dependent on one source," said the ambassador to Caracas of one Petrocaribe country. "We don't want to put all of our eggs into one basket and then be left with nothing when reality hits."

Kejal Vyas contributed to this article.

Write to Ezequiel Minaya at

Credit: By Ezequiel Minaya

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 6, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1631610751

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1631610751?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

The Black-and-Blue Sector --- Shares in Small and Midsize Energy Drillers Take a Hit From Oil's Downturn

Author: Strumpf, Dan

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Dec 2014: B.5.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

The selloff in crude prices has bruised energy companies big and small, but none have felt the pain worse than the nation's heavily indebted oil drillers.

Shares of small, North America-based oil and gas producers that loaded up on debt during times of high oil prices have plunged in the past month, in some cases losing half their market value or more.

Mr. Green owns a number of shares of smaller energy producers. He said he is hanging on, betting oil prices will rebound.

Investors said crude prices could return to more lofty levels if a geopolitical shock erupts or global growth picks up.

Energy XXI, which operates in the Gulf of Mexico area, has a debt load that is more than 11 times its market value. Shale producer Halcon Resources has a debt-to-equity ratio of more than 4 to 1. An Energy XXI spokesman said the company has hedged to protect against low oil prices through 2015, and "we're starting to work on our 2016 hedges as we speak." Halcon didn't respond to a request for comment.

"Some smaller-cap names don't have as clean balance sheets," she said. "In these times of high uncertainty, a clean balance sheet is definitely required, as well as disciplined management."

Credit: By Dan Strumpf

Subject: Petroleum industry; Investment advisors; Debt restructuring; Junk bonds; Crude oil prices; Stock prices; Corporate debt

Location: United States--US

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Goodrich Petroleum Corp; NAICS: 211111; Name: Halcon Resources Corp; NAICS: 211111; Name: Energy XXI USA Inc; NAICS: 211111

Classification: 3100: Capital & debt management; 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.5

Publication year: 2014

Publication date: Dec 6, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1632441320

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1632441320?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

World News: An Ailing Venezuela Trims Oil Diplomacy

Author: Minaya, Ezequiel

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Dec 2014: A.7.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

KINGSTON, Jamaica -- Some Caribbean and Central American countries are bracing for cutbacks in shipments of cut-rate oil from Venezuela, as Caracas struggles with sliding crude prices and a spiraling economic crisis.

Several participants in the program, called Petrocaribe, are preparing for further declines, which diplomats said stand to upend spending plans and tip some economies into recession.

"If Petrocaribe pulls out of Jamaica I don't know how we are going to manage," said Verona Barrett-Brown, the principal of a Kingston-area primary school that displays the name of Venezuela's national oil company, Petroleos de Venezuela, or PdVSA, on the wall. "It will be a dark day."

In tiny Grenada, the discounted Venezuelan oil funds 40% of social programs, from textbooks and free lunches for children to paying for roads and buses. Haiti named an airport after Venezuela's late President Hugo Chavez, who founded Petrocaribe in 2005, and uses the oil money for food distribution programs and for monthly allowances for the poor. The Dominican Republic has used the program to plug a fiscal hole.

And here in Jamaica's capital, projects funded with Venezuelan oil have provided aid to small farmers and businesses, refurbished a zoo and replaced pit latrines in schools with toilets.

Venezuelan oil prices have fallen about a third since this summer to $61 a barrel as of Wednesday, which Deutsche Bank says is half of what is needed to cover the central government's budget. With inflation soaring and Wall Street expressing concerns about a default, President Nicolas Maduro announced on Dec. 3 that he would cut spending 20%.

Venezuelan officials have made no public mention of cutbacks to Petrocaribe or other oil-aid programs, such as the arrangement to ship 99,000 barrels a day to Cuba in exchange for doctors who work in Venezuelan slums. Venezuelan Foreign Minister Rafael Ramirez recently reiterated his government's "strong commitment to continue the Petrocaribe initiative, under any circumstances."

But a quiet shift is taking place.

Honduras and Guatemala are now inactive in the program after Caracas toughened the terms, diplomats said.

Some governments sold the oil at full price or simply earmarked savings from not having to buy fuel at market prices for programs and infrastructure. Venezuela was repaid in rice, chicken, beans, jeans and other products that Jorge Pinon, director of the Latin America and Caribbean Energy Program at the University of Texas at Austin, said were sold at artificially high prices.

The program has cost Venezuela $22.1 billion, with Petrocaribe countries accumulating more than $11 billion in debt through 2013, said Mr. Pinon, basing his calculations on PdVSA data.

In March, for instance, Venezuela's allies, including Petrocaribe countries, barred a prominent Venezuelan opposition leader's speech at the OAS from being broadcast publicly, the diplomats said.

Credit: By Ezequiel Minaya

Subject: Diplomatic & consular services; Cost control; Recessions; Crude oil prices; Economic crisis; Government spending; Petroleum industry; Exports

Location: Venezuela Jamaica

People: Maduro, Nicolas Chavez, Hugo

Company / organization: Name: Deutsche Bank AG; NAICS: 522110, 551111; Name: Petroleos de Venezuela SA; NAICS: 211111

Classification: 1300: International trade & foreign investment; 8510: Petroleum industry; 9173: Latin America

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.7

Publication year: 2014

Publication date: Dec 6, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1632445251

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1632445251?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Russia's Oil Shakeout Shouldn't Stir Banking Fears; European Lenders' Exposure Looks Manageable

Author: Davies, Paul J

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

Vladimir Putin is talking tough--but the falling oil price is making Russia weak.

The Russian president has promised to bolster his country's banks with public money. He has taken potshots at the speculators he blames for the ruble's collapse. For investors, one worry is the risks to European banks through their lending to Russian clients and the oil industry in general. Thankfully, the exposures mostly look manageable.

Fighting that with fiscal measures is tough because the government gets half its revenues from oil and gas taxes. In November, an oil price of $98 a barrel was needed to balance the budget, according to Fitch. Brent crude has since plunged to less than $70.

Last month's decision toeases some strain. Its drop implies the budget-balancing oil price has dropped to about $82.50. But a slowing economy also means more reliance on oil receipts. The true break-even price might be nearer to $85.

Mr. Putin hopes to stimulate the economy by giving Russia's banks more capital for lending. But credit risk is still rising.

Take Société Générale, which has most direct Russian exposure among Europe's large banks: Its loan-loss provisions in the first nine months of 2014 rose 63% to [euro]243 million ($300.8 million) in the country. But its total loans in Russia, mostly mortgages and car loans, are [euro]13 billion, just 3.7% of all lending, and equivalent to about one-third of its core equity.

If the French bank had to write off all equity and internal funding commitments to its Russian arm, that would cost only [euro]6.50 a share, reckons Nomura. With tangible net assets of [euro]51 a share and a stock price of [euro]39.28, investors have more than discounted this risk.

Raiffeisen Bank's position looks more perilous: Its Russian exposure is more than double tangible net asset value and 1.6 times its core equity. ING Bank, meanwhile, lends directly into Russia. But it has been cutting back such loans, now just 1.4% of total loans and equivalent to less than one-quarter of core equity.

Another risk is banks' exposure to the energy industry in general. Yet Europe's lenders have lost ground in this market, notes Citigroup. BNP Paribas is still the biggest European lender to the global oil industry. But its market share has dropped to 2.6% from 6% in 2009-10. HSBC, Royal Bank of Scotland, Barclays and SocGen are outside the top 10.

There are still risks, especially in syndicated and high-yield bonds. In skittish markets, arrangers can be left holding more than planned. Since 2011, BNP, Credit Suisse and Barclays have been the top European arrangers of such deals, underwriting $43 billion, $33 billion and $31 billion of loans and bonds, respectively, notes Nomura.

As Russia and the oil sector sputters, there will be blood. But European banks shouldn't spill too much.

Credit: By Paul J. Davies

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 7, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633895382

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633895382?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Exxon and M&A: The Crude AbidesExxon and M&A: The Crude Abides; Climate Improves for Exploration-and-Production Acquisitions

Author: Denning, Liam

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2014: n/a.

ProQuest document link

Abstract:

Even as their colleagues on the trading floor wail, investment bankers can smile at falling oil prices.

Links: 360 Link to Full Text

Full text:

Even as their colleagues on the trading floor wail, investment bankers can smile at falling oil prices.

Cheaper oil means pain for exploration-and-production companies--and the rising possibility that they seek sanctuary in each other's arms. Rumors of potential deals involving big companies such as Exxon Mobil and the U.K.'s BG Group are swirling.

Yet while some deals may make sense, recent history means they will be cautious on placing that call to their banker. Mergers and acquisitions likely will become a bigger theme later in 2015.

That isn't to deny that the conditions for M&A are falling into place. Witness oil-field-services giants Halliburton and Baker Hughes attempting a deal. In the past three months, oil has fallen by about 30% and E&P stocks have dropped 36%. Yet Exxon's shares have lost less than 5% of their value.

In terms of its average multiple of enterprise value to forward earnings before interest, taxes, depreciation and amortization, the E&P sector now trades at roughly a 30% discount to Exxon, according to FactSet. That compares with an average premium of 8% and a maximum of almost 50% since 2007. Take BG, touted perennially as a takeover candidate: It now trades at a slight discount to Exxon versus an average premium of 34%.

On paper, BG looks a likely candidate. It has world-class assets, notably in Brazil and its liquefied natural-gas business. But these are housed in a company suffering from executive turmoil, high sensitivity to oil prices and doubts about key projects being delivered on time. At current prices, Exxon could offer a 30% premium, funded 75% with its own stock, and, based on consensus estimates, this would be accretive to 2016 earnings by more than 20%, before synergies.

Beware earnings forecasts when oil is sliding, though. And earnings accretion doesn't drive Exxon's M&A strategy anyway. When it bought XTO Energy in 2010, it said upfront it could be dilutive.

That earlier deal is illustrative in another way, too. As Doug Terreson of Evercore ISI points out, what counts for Exxon is return on capital employed. XTO's was much lower, helping to cut Exxon's annual return to 18% last year from 34% in 2008. Exxon's valuation premium, and some of its reputation as a savvy deal maker, followed. Last year, BG's return on capital was about 10%.

Any potential deal must also compete with Exxon's favorite acquisition target: its own stock. Over the past decade, Exxon has repurchased $220 billion of its shares, roughly equivalent to rival Chevron's current market value. With Exxon's borrowing costs below 5%, cost of equity at about 10%, and its net debt low, buybacks remain a formidable competitor to any deal.

To overcome that, Exxon would need to see deeper, strategic value. With its long-term growth plans in Russia at risk in today's environment, Exxon could use some new, exciting opportunities. BG's Brazilian assets or an E&P company's U.S. shale prospects would fit that bill. With XTO's legacy still apparent, though, selling a strategic deal to investors requires Exxon securing an unambiguously bargain price. Given the dismal outlook for oil prices, that will get easier to do as next year unfolds.

Credit: By Liam Denning

Subject: Acquisitions & mergers; Prices; Petroleum industry

Location: United Kingdom--UK

Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: XTO Energy Inc; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 7, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633928431

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633928431?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

U.S. Consumer Stocks Draw Fans as Oil Sinks; Big-Box Stores, Auto-Parts Retailers Have Jumped; Some Investors Warn About Pricey Valuations

Author: Scaggs, Alexandra

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2014: n/a.

ProQuest document link

Abstract:

Money managers are homing in on consumer-focused stocks after a sharp decline in oil prices that stands to improve U.S. household finances, though some warn that the biggest gains in those shares may already be history. Many investors reason that these firms stand to gain the most from tumbling energy costs because low-wage earners spend more of each paycheck than wealthier Americans on filling up, so lower gas prices give them funds they are likely to quickly deploy on household goods and other necessities.

Links: 360 Link to Full Text

Full text:

Among the top beneficiaries from this fall's energy-price plunge have been big-box stores, low-price restaurants and auto-parts companies. Many investors reason that these firms stand to gain the most from tumbling energy costs because low-wage earners spend more of each paycheck than wealthier Americans on filling up, so lower gas prices give them funds they are likely to quickly deploy on household goods and other necessities.

Shares of big-box giant Target Corp. have gained 18% this quarter, compared with the 5.2% advance by the S&P 500. Auto-parts retailer O'Reilly Automotive Inc. is up 25%, Costco Wholesale Corp. has added 14% and Wal-Mart Stores Inc. has risen 10% since Sept. 30. Each cited falling gasoline prices in their latest profit reports as a positive for earnings.

"It's clear the consumer is catching a break," said Margaret Vitrano, who manages $7.9 billion for ClearBridge Investments. "It isn't enough to go on a cruise, but it's enough to upgrade from chicken to steak."

Ms. Vitrano owns Target shares, and thinks the Minneapolis retailer's sales should get a boost from the decline in gas prices.

U.S. crude-oil prices have fallen 39% since June, amid flagging global demand and a strengthening dollar. On Friday, crude futures settled at $65.84 a barrel.

Retail gasoline prices in the U.S. were down 17% on Friday from a year earlier, at an average $2.711 a gallon, according to auto club AAA.

The recent declines should put at least an extra $40 billion in U.S. consumers' pockets in the fourth quarter of this year, according to an Oct. 27 report from Morgan Stanley. That would translate into about $42 per person each month, based on population estimates from the U.S. Census Bureau.

That cash packs a bigger punch with lower-income consumers. Families with annual income below $50,000 spent, on average, about a fifth of their earnings on energy in 2012, according to Bank of America Merrill Lynch.

In addition to retailers, beneficiaries have included other heavy users of energy, such as the airline sector, which is up 27% this quarter, road and rail stocks, up 6.8%, and gas and electric utilities, up 3.9% and 9.4%, respectively.

By contrast, energy-equipment and services stocks in the S&P 500 are down 21% in the fourth quarter.

But some investors already are warning that the rally has brought shares of retailers favored by low-income consumers to pricey levels.

Stocks of many retailers are trading at higher valuations than broad market indexes, raising concerns that further gains could be limited. The shares could be vulnerable to disappointments during the holiday season, such as the recent weak Black Friday sales, which fell 11% from the year before, according to an industry trade group.

"There are probably more gains to come,...[but] you probably need to be a little more selective," said Paul Karos, a portfolio manager with Denver-based Whitebox Mutual Funds, which manages more than $1 billion. "The big, quick bounce has already happened."

O'Reilly, for example, is trading at 23 times next year's expected earnings, according to FactSet, above its 10-year average of 17.6 and well above the S&P 500, which is trading at 16.2 times next year's forecast earnings.

The stocks in the SPDR S&P Retail exchange-traded fund are trading at 22 times Wall Street analysts' expected earnings for the next year, according to FactSet, above their 10-year average of 16.

But many bullish retail investors say the gathering U.S. recovery will trump valuation concerns. On Friday, the government reported U.S. employers added 321,000 jobs in November, putting the economy on track for its best year of job growth since 1999.

"If [the economy] keeps adding jobs, there are more people to spend," said Ralph Segall, chief investment officer of Chicago-based Segall Bryant & Hamill, which manages $9 billion.

To be sure, falling gas prices are no panacea. Consumers are still pinched by soft wage gains and many still have yet to find full-time work.

And within retail, not everyone has managed to capitalize. Shares of some teen-apparel retailers have fallen. Aeropostale Inc., for example, is down 25% this quarter, and tumbled 22% on Thursday, when it cut its forecasts for 2015. Abercrombie & Fitch Co. also recently cut its estimates for 2015's profit, and said its U.S. sales fell 7% in the quarter ended Nov. 2. Its stock is also down 25% in the fourth quarter.

"The consumer is still very discerning about where they're spending their money," said Peter Dixon, who helps manage $2.5 billion of consumer stocks for Fidelity Investments, including the $810 million Fidelity Select Retailing Portfolio. Mr. Dixon owns shares of auto-parts retailers AutoZone Inc. and O'Reilly Automotive.

Write to Alexandra Scaggs at

Credit: By Alexandra Scaggs

Subject: Retail stores; Stocks; Gasoline prices; Petroleum industry; Statistical data

Location: United States--US

Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Bank of America Merrill Lynch; NAICS: 522110, 55 1111; Name: Bureau of the Census; NAICS: 926110; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Co stco Wholesale Corp; NAICS: 452910; Name: O Reilly Automotive Inc; NAICS: 441310; Name: Target Corp; NAICS: 452112

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 7, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633928481

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633928481?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Refinery Symbolizes Woes of Brazilian Oil Firm Petrobras; Project, at Hub of Corruption Scandal, Is 3 Years Behind, $20 Billion Over Budget

Author: Connors, Will

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

RIO DE JANEIRO--Brazil's newest refinery was supposed to reduce the nation's dependence on imported gasoline and signal a new era in Latin American energy independence.

Instead, the refinery, the first built in Brazil in nearly 40 years, has come to symbolize big troubles at state-run oil company Petroleo Brasileiro SA.

Three years behind schedule and nearly $20 billion over budget, the Abreu e Lima refinery, which opened Saturday, is at the center of a deepening corruption scandal plaguing Petrobras and newly re-elected President Dilma Rousseff.

Earlier this year, federal police uncovered what they say was a scheme hatched by contractors and Petrobras executives to pay bribes to get contracts at the refinery and other projects, using some of the extra money to pay off local politicians and pocketing the rest.

Last month, federal police in Brazil arrested 23 people, including a second former Petrobras executive and executives from more than 16 contractors, for their alleged roles in the kickback scheme.

President Rousseff has acknowledged there was wrongdoing, and says the arrest show an era of "impunity" is over in Brazil. But the scandal tarnished what should have been a triumph for Petrobras. There was no ribbon-cutting ceremony or visit by state leaders when the refinery opened.

"What we want as a state is for it to work, to create jobs and to generate tax revenue, whether there's a party or not," said Márcio Stefanni, secretary of economic development for Pernambuco state, where the refinery is located. He declined to comment on the troubles facing the project, which is largely supported by local politicians.

Brazil's leaders were jubilant about the project in 2005. That year, Brazil's then-president Luiz Inácio Lula da Silva stood beaming alongside the late Venezuelan president, Hugo Chávez, at a cornerstone-laying ceremony for the refinery. Ms. Rousseff, then chairwoman of Petrobras, also was there.

The refinery was named after a Brazilian freedom fighter that Mr. Chávez admired and would symbolize both a new partnership between Brazil and Venezuela and the start of a push toward Latin America energy independence.

Venezuela, whose state-run oil company PDVSA had agreed to kick in 40% of the project funds in exchange for refining its oil at the facility, would be able to stop refining all of its oil in the U.S. Brazil would get a guaranteed customer for its flagship refinery.

At the event, Mr. Chávez said the refinery would help South America overcome the "imperialism of the North." Many in the crowd, according to media reports at the time, wore T-shirts that read: "The refinery is ours."

From the start, the project was beset by problems. The site of the refinery, in northeastern Brazil, is hundreds of miles away from most of the country's oil-industry infrastructure, and was criticized as a political choice.

The refinery was dogged by delays, caused by everything from workers striking for better pay to heavy rains.

Venezuela never contributed money to the project. Costs started to pile up, and were soon well past the original $2.5 billion estimate. Petrobras's most recent estimate of the total cost is $18.5 billion.

Petrobras declined to comment for this article. In previous statements about Abreu e Lima, the company has attributed the cost overruns to premature cost assessments and "exchange rate adjustments."

Earlier this year, federal police uncovered what they say was a cartel of construction company officials involved in overbilling for work at the refinery and other projects. Two former Petrobras executives in the company's refining and engineering units were arrested on money-laundering and fraud charges.

Last month, more than 20 people allegedly involved in the case were arrested, including some of Brazil's wealthiest construction executives.

"I believe that the criminal scheme had to do with the change in value [for contracts], which was far above what was reasonable," said Carlos Fernando dos Santos Lima, one of the eight federal prosecutors working on the case.

In a separate investigation, Brazil's auditing body, known as the TCU, says there were "serious irregularities" at the refinery. The TCU estimates that the alleged overpayment for work at the refinery totals more than $145 million--including $27 million in overpayment for earth-moving services alone.

Shares of Petrobras have taken a hit as the corruption investigation has gained steam, and losses have continued as the price of oil has plummeted. Petrobras shares hit a 10-year low Friday, closing at $8.82, and are down 54% over the past three months.

Despite the project's problems, Petrobras had little choice but to push forward. Brazil's dependence on imports has more than doubled since 2007. The company's refining unit has lost $24 billion in the past four years, mostly because the company is forced to pay for a government-imposed fuel subsidy.

"Abreu e Lima coming online, despite all the problems, is good news for the company," said Joao Augusto de Castro Neves, an analyst with the Eurasia Group. "But I think the government doesn't want to draw attention to Petrobras, even if it's good news."

Today Petrobras has 12 refineries, which have a capacity of 2.1 million barrels per day. The company wants to boost that figure to 3.3 million barrels per day by 2020.

The Abreu e Lima refinery will first start with a capacity of 115,000 barrels a day and eventually ramp up to 230,00 barrels a day next year, 70% of which will be diesel. Petrobras officials say the startup of the refinery will cut total fuel imports to Brazil by one third.

Even when Abreu e Lima is up and running, Petrobras' refining division troubles won't be over. A separate refinery under construction in Rio de Janeiro, the Comperj facility, is expected to cost roughly $21 billion before completion in 2016, more than $7 billion above Petrobras' own estimate, according to the TCU.

Paul Kiernan contributed to this article.

Credit: By Will Connors

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 7, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633936836

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633936836?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Oil Trains at Junction in North Dakota; Fracking Companies Await Regulator's Decision on Stabilizing Crude Before Shipment

Author: Dawson, Chester

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]of those concerns, both have ordered new crude oil tests using methods designed to prevent dissolved gases, known as light ends, from escaping before and during testing.

Links: 360 Link to Full Text

Full text:

Oil producers in North Dakota are expected to face new regulations soon on treating their crude oil if the state's chief energy regulator follows through this week on promised standards aimed at ensuring that can be more safely shipped by rail.

The North Dakota Industrial Commission will meet on Tuesday to complete steps it proposed last month that would require oil companies as of Feb. 1 next year to start removing volatile gaseous compounds before shipping their crude on railroads crisscrossing the country.

The commission's decision will be closely watched because critics say the proposals don't go far enough while the oil industry has complained they go too far. North Dakota has felt pressure to act amid growing concern nationwide that Bakken crude poses a higher threat in a derailment or other accident.

Production of light shale oil through hydraulic fracturing, or fracking, makes up the majority of the additional three million barrels a day of oil that the U.S. produces today compared with 2009. Much of that is shipped by rail, especially crude produced from Bakken Shale because of North Dakota's lack of pipelines.

Some activists in North Dakota and a growing chorus of leaders in local municipalities and other states have raised questions about the safety of Bakken crude-by-rail shipments in the wake of a , including one in July 2013 that killed 47 people in a Quebec town.

North Dakota's move toward mandating the stabilization or treatment of oil before shipment has been met with resistance from many producers in the state, who say it poses an unnecessary burden on the industry at a time when profits are being squeezed from a drop in global crude prices.

"We're anxiously awaiting to see what the language looks like," said Kari Cutting, vice president of the North Dakota Petroleum Council, an industry lobby. "With the reduction in crude oil prices, we should be mindful of the regulatory impact of what [the state's] trying to accomplish," she said.

The proposals would require heating oil in the field to remove dissolved gases such as butane and propane from the liquid. That would lower the vapor pressure and decrease the risk and size of a fireball if a railcar is punctured, a possibility North Dakota officials had previously played down.

Many lighter crudes produced by fracking contain elevated levels of highly volatile gases, including those recovered from the Eagle Ford shale formation in Texas. But unlike the Bakken's light oil, Eagle Ford light crude is routinely stabilized before being shipped out by pipeline or rail to refineries.

The Wall Street Journal reported in February that based on an at a pipeline in Louisiana, Bakken Shale had a far higher vapor pressure--making it much more likely to emit combustible gases--than dozens of other crude oils.

Since then two industry-funded studies have attempted to debunk the notion that Bakken crude is more volatile than other types of oil. But some industry experts have questioned those studies' findings, saying they used outdated and unreliable crude testing methods to measure vapor pressure levels.

As a result of those concerns, both have ordered new crude oil tests using methods designed to prevent dissolved gases, known as light ends, from escaping before and during testing.

Bakken oil producers have sought to modify the planned rules by petitioning the North Dakota Industrial Commission, some submitted minutes ahead of a comment period deadline six days after the proposals were announced on Nov. 13.

Among other things, the industry wants to delay the implementation date, adopt a target instead of a maximum limit for vapor pressure and allow the use of older crude testing methods. But supporters of tougher regulations on oil shipments have urged the state not to scale back its initial draft order.

"I certainly hope they don't backtrack," said Sen. Connie Triplett, a Democratic state legislator in North Dakota who registered her concerns about crude volatility in testimony before the North Dakota Industrial Commission in September. "We have to start somewhere and this is a reasonably positive first step," she said.

The Week Ahead looks at coming corporate events.

Write to Chester Dawson at

Credit: By Chester Dawson

Subject: Crude oil; Petroleum industry; Shipping industry; Crude oil prices; Hydraulic fracturing

Location: North Dakota

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633945175

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633945175?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil's Decline Is Far From Confined; Impact of Falling Prices Likely to Be Felt Far Beyond Energy Sector

Author: Casey, Michael J

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

Some investors say that after six years of unprecedented monetary stimulus from the Federal Reserve and other big central banks, with more to come from the Bank of Japan and the European Central Bank, there are plenty of policy-induced distortions for speculators to go after, such as ultralow sovereign-bond yields in weaker European economies.

Links: 360 Link to Full Text

Full text:

So far, few outside the energy sector have been hurt by this year's oil rout. But the ripples likely have only begun to be felt.

Falling oil prices are on balance positive for energy consumers such as the U.S., and with the Dow Jones Industrial Average hitting a new record Friday, investor confidence appears intact. Yet some analysts and investors say a 39% plunge in crude futures since June could lay the groundwork for unpredictable market shifts and increasing price swings, or volatility.

In a worst-case scenario, oil's selloff could ultimately result in a shock akin to the Asian currency crisis of 1997-98. That episode--which started with a devaluation by Thailand--rattled markets and economies around the globe after many traders initially misjudged it as minor and inconsequential.

Most investors expect the U.S. economy and global markets to avoid such a fate this time. But the great lesson of the Asian crisis is that in a complex, global economy with many moving parts, a major change in one market's price will shift the relative value of multiple investment propositions, often with unpredictable consequences.

"Economies and markets are like battleships: they can handle large changes as long as the large changes are gradual," said Jack Ablin, chief investment officer at BMO Private Bank. "When you have a 40% change within a six-month period for such an economically dominant commodity as oil, there are unforeseen side-effects."

While beneficial to importers and consumers, this year's disorderly decline in oil will put the finances of drillers, commodity investors and even entire governments at risk. Importantly, it may also send a signal that prior assumptions about global economic demand were exaggerated, potentially prompting investors and businesses to scale back planned expenditures and forcing a revaluation of all assets.

As they did in 1997-98, "the artifices will have to break at some point," says Tad Rivelle, chief investment officer for fixed income at TCW Group.

Thailand devalued its currency, the baht, in July 1997, altering Asia's competitive landscape, revealing weaknesses in other exchange-rate regimes and encouraging short-selling speculators to attack them.

Twenty months later, a violent global rebalancing had led to devaluations in the South Korean won, the Indonesian rupiah, the Russian ruble and the Brazilian real.

It also brought the giant Long-Term Capital Management hedge fund to the verge of collapse, prompting a rescue sponsored by the Federal Reserve. By that time, investors had grown so risk averse that even certain Treasury bonds looked risky.

A trigger for a new round of financial or economic turmoil could easily come from numerous sources--if the Fed increases rates faster than expected, for example, or if China devalues the yuan.

There are big imbalances in the global economy that leave it vulnerable to such shocks, and they contain some eerie parallels with 1997-98. Back then, oil prices also were plunging, as was the Russian ruble, which has dropped 38% this year. And like now, the dollar was rising, an Asian currency war was looming, there was talk of bubbles in tech stocks and other asset prices, and the U.S. was a bastion of growth in a sputtering global economy.

To be sure, there are reasons to believe emerging markets are now more resilient. Emerging-market central banks have abandoned the pegged exchange rates that "made them sitting ducks" in the 1990s, Roubini Global Economics chairman Nouriel Roubini said, and built up large dollar reserves. The rise of local-currency bond markets reduces exposure to exchange-rate volatility, and last year's "taper tantrum" removed much of emerging markets' frothiness.

But there are also some glaring, unsustainable distortions in global markets. Last week saw record lows on Spanish and Italian debt, the very same bonds that threatened to destroy the eurozone two years ago, and a mere 6.6% yield for Ethiopia's maiden 10-year bond sale.

The Fed holds a key to how this plays out, just as it did with the Asian crisis. In March 1997, a mere quarter-point increase in the federal funds rate helped set off the crisis as it drew money out of emerging markets into U.S. assets and pushed up dollar-pegged emerging-market currencies to untenable heights.

Now the risk is that a U.S. rate hike next year will hit overpriced emerging-market bonds hard, cutting off access to finance across the developing world.

China also matters in a way akin to Japan's role 16 years ago. Back then, Japan's mid-1990s descent from industrial powerhouse to deflation-wracked basket case cut off a vital source of demand for Asia's dollar-pegged exporters. Now, it is China's slowdown that's spilling over into South Korea, Indonesia and other economies.

"There was definitely a regional cycle back then with parallels to what's going on today," warns Harvard economics professor Kenneth Rogoff. "And now Asia's bigger than it was by a lot, with a global footprint."

A vital question is how the People's Bank of China responds to the competitive challenge of a weaker Japanese yen and Korean won. If Beijing caves in and adopts the beggar-thy-neighbor policies in vogue at the moment, those ripples could become tidal waves.

Write to Michael J. Casey at

Credit: By Michael J. Casey

Subject: Central banks; Monetary policy; Banking; Prices; Financial executives; Emerging markets

Location: Thailand United States--US

Company / organization: Name: European Central Bank; NAICS: 521110; Name: Bank of Japan; NAICS: 521110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633948512

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633948512?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Falling Oil Prices Spur New Bets on Global Economic Growth; Policy Makers Shrug Off Concerns That Tumbling Oil Costs Are Harbinger of Slowdown

Author: Talley, Ian

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

Officials at the International Monetary Fund, U.S. Federal Reserve and European Central Bank have in recent days shrugged off concerns that the tumbling cost of crude signals a global slowdown. The fund attributes roughly 80% of the fall in oil prices to supply-side causes, such as fuel-efficiency standards and decisions by the Organization of the Petroleum Exporting Countries, and only 20% to declining demand from slowing growth.

Links: 360 Link to Full Text

Full text:

Many of the world's top policy makers are rewriting their economic forecasts for the U.S., Europe, Japan and elsewhere, betting plummeting oil prices will lead to an overall boost in the global economy by delivering a windfall to consumers and manufacturers.

Officials at the International Monetary Fund, U.S. Federal Reserve and European Central Bank have in recent days shrugged off concerns that the tumbling cost of crude signals a global slowdown. Instead, they project cheaper oil will be a shot in the arm for the world economy overall, especially countries with high energy tabs.

Stanley Fischer, vice chairman of the U.S. Federal Reserve, called it a "supply shock" that will help the U.S. "It's more likely to increase GDP than reduce it," he said.

"The effect is unambiguously positive," European Central Bank President Mario Draghi declared after the bank's .

Some economists warn that the nearly 40% plunge in crude-oil prices in recent months is more a harbinger of gloom as Europe flirts with recession, from its own slump and risks morphing into a steeper pullback. Indeed, historically, sharp drops in oil prices tend to be associated with recessions as energy demand collapses.

This time, though, a range of supply-boosting factors is shifting the calculus for many officials and economists--from advanced drilling techniques to a revival in Libyan oil supply and a bid by some Middle Eastern producers to price competitors out of the market.

"This time is different," said Guy Caruso, a former head of the U.S. Energy Information Administration and a senior adviser at the Center for Strategic and International Studies, a nonpartisan think tank.

Whether the recent price tumble is driven more by a supply glut or a drop in demand could determine the direction of the global economy in the coming year. The cost of West Texas Intermediate crude has fallen into the mid-$60 a barrel range, down by about $40 a barrel since mid-June.

Falling energy prices are clearly hurting major oil exporters such as Iraq, Algeria and Nigeria that rely heavily on petroleum revenues. It is particularly bad news for countries such as Russia, Venezuela and Iran already facing deep economic problems.

But for major oil importers such as Japan, Italy and Germany, the IMF calculates the price plunge since June could add nearly a percentage point of gross domestic product to their economies.

So far, Japan's economy appears to remain in the doldrums. It contracted for the second straight quarter in the July-to-September period, in Japan showed. GDP shrank an annualized 1.9% from the previous three-month period as private consumption showed little sign of life.

The IMF is raising its forecast for U.S. growth next year to 3.5% from its last estimate of 3.1%, in part because of expected lower energy costs.

"There will be winners and losers, but on a net-net basis, it's good news for the global economy," said IMF Managing Director Christine Lagarde at The Wall Street Journal last week.

The fund attributes roughly 80% of the fall in oil prices to supply-side causes, such as fuel-efficiency standards and decisions by the Organization of the Petroleum Exporting Countries, and only 20% to declining demand from slowing growth.

J.P. Morgan Chase economists put the ratio lower: 55% because of supply and 40% from weaker emerging-market growth. The bank still estimates, however, that the price decline could add 0.7 percentage point to global growth over the next two quarters.

Part of the boost comes from lower transportation and manufacturing costs, particularly for energy-intensive industries such as airlines and steelmaking. The primary benefit is more cash in consumers' wallets as they spend less of their paychecks fueling their vehicles, spurring more consumer spending.

Research group IHS Global Insight says the average U.S. household should have an extra $750 in its pockets over the next year compared with the last 12 months, if prices hold.

One risk for policy makers: Viewing the drop in oil prices as a net positive could cloud an underlying sluggishness in the global economy. "It is impossible to ignore the role of weakening global demand," said Stephen King, HSBC's global chief economist. "Lower oil prices are partly a reflection of broader deflationary trends."

Key emerging markets from Brazil to South Africa to India have been struggling for more than a year, partly driven by China's slowdown.

"China is the big issue," said Kevin Book, managing director at consulting firm Clearview Energy Partners. Mr. Book is skeptical that growth in oil demand next year will come close to the International Energy Agency's estimate of 1.1 million barrels a day. The reason: slower growth than currently expected from the world's No. 2 economy. "And weakness in one place generally portends weakness elsewhere," especially in Europe, he said.

"It seems unreasonable to think that the industrial engine of the emerging markets is somehow disconnected from the consuming engine of the developed world," Mr. Book said.

Most previous major oil-price drops accompanied recessions, or at least signaled downturns. A series of contractions in the U.S. economy and other major powerhouses of the global economy in the early 1980s are blamed for sending inflation-adjusted prices from a high of $116 a barrel in April 1980 to a 13-year low of $25 by 1986. Prices also skidded in the wake of the Asian financial crisis in the late 1990s and the 2008 global financial crisis.

Economists generally agree the current drop is partly due to anemic growth in Europe and a slowdown in China. But the IEA and other experts say outsize oil production is largely behind the decline.

"It's mainly supply, with strong numbers from all over North America coming at a time when some of disrupted supply came back online," said Mr. Caruso of the Center for Strategic and International Studies.

Advanced drilling techniques have allowed the U.S., Canada and other producers to ramp up production. Meanwhile, Saudi Arabia, Qatar and other have kept their wells running in a bid to price competitors out of the market. Since May, nearly 700,000 barrels of crude oil a day of unplanned OPEC production have come back online, largely in Libya. New technology and tightening regulations, particularly in the U.S., have also boosted fuel efficiency.

Trevor Houser, a partner at the Rhodium Group consultancy and a fellow at the Peterson Institute for International Economics, estimates major oil-importing countries could see their import bills cut by more than $500 billion if prices remain low for another six to eight months. That includes roughly $90 billion for the U.S. alone.

Global bank UBS AG estimates that every $10 decline in oil prices will add around 0.2 percentage point to global GDP. China, Japan, Germany, India, South Korea, Italy, France and a number of other countries spend a much higher percentage of GDP on crude purchases than the U.S. does.

Japan, which spent around 3.6% of its GDP to pay for its oil imports in June, is one of the biggest beneficiaries. The drop in oil prices cuts the country's crude bill by nearly 1.2% of GDP.

"I would be optimistic, indeed expectant, that the decline in oil prices is going to be something that is positive to the Japanese economy," Nathan Sheets, the U.S. Treasury's undersecretary for international affairs, said.

Write to Ian Talley at

Credit: By Ian Talley

Subject: Central banks; Petroleum industry; Prices; Economic development; Recessions; Economic growth; Gross Domestic Product--GDP; Economic forecasts; Economists

Location: United States--US Japan Europe

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Economy

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633948570

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633948570?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Exxon and M&A: The Crude Abides; Climate Improves for Exploration-and-Production Acquisitions

Author: Denning, Liam

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

Even as their colleagues on the trading floor wail, investment bankers can smile at falling oil prices.

Links: 360 Link to Full Text

Full text:

Even as their colleagues on the trading floor wail, investment bankers can smile at falling oil prices.

Yet while some deals may make sense, recent history means they will be cautious on placing that call to their banker. Mergers and acquisitions likely will become a bigger theme later in 2015.

Beware earnings forecasts when oil is sliding, though. And earnings accretion doesn't drive Exxon's M&A strategy anyway. When it bought XTO Energy in 2010, it said upfront it could be dilutive.

Write to Liam Denning at

Credit: By Liam Denning

Subject: Acquisitions & mergers; Prices; Petroleum industry

Location: United Kingdom--UK

Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: XTO Energy Inc; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633952897

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633952897?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Russia's Oil Shakeout Shouldn't Stir Banking Fears; European Lenders' Exposure Looks Manageable

Author: Davies, Paul J

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

Vladimir Putin is talking tough--but the falling oil price is making Russia weak.

Last month's decision to eases some strain. Its drop implies the budget-balancing oil price has dropped to about $82.50. But a slowing economy also means more reliance on oil receipts. The true break-even price might be nearer to $85.

Mr. Putin hopes to stimulate the economy by giving Russia's banks more capital for lending. But credit risk is still rising.

As Russia and the oil sector sputters, there will be blood. But European banks shouldn't spill too much.

Write to Paul J. Davies at

Credit: By Paul J. Davies

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633958630

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633958630?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Fund Fiend; Changed World for Energy-Stock Pros; Oil Prices Used to Call the Tune, but Now the Companies Matter

Author: Lauricella, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

Among other stocks in the fund that he says are benefiting from this strategy of focusing on costs are EOG Resources Inc., Anadarko Petroleum Corp. and Cimarex Energy Co. As for oil prices, Mr. Dowd says he simply isn't sure where they will settle.

Links: 360 Link to Full Text

Full text:

As manager of the $1.9 billion Fidelity Select Energy Portfolio, John Dowd can't ignore the 38% drop in oil prices over the past few months.

But Mr. Dowd, an energy analyst since 1990 and manager of the Fidelity fund since 2006, says that for many of the stocks he invests in, swings in oil prices matter much less than they used to.

"There was a time in the '90s and 2000s where being an energy [stock] analyst meant basically getting [the] call on the commodity right," he says. "With the advent of the U.S. shale-oil story, it's become something different."

Energy stocks still get knocked around in the short term by ups and downs in oil prices. But he says that these days, getting the longer-term calls right is more about analyzing energy companies' cost structures and development plans--in other words, just like most other kinds of stocks.

A sharp drop in the price of oil has been one of the big surprises of 2014. Leading prices lower has been a pair of powerful forces: a slowing global economy at a time when production in the U.S. has been soaring, thanks to the U.S. shale-oil boom and advances in drilling technologies.

Against this backdrop, Mr. Dowd's fund is down 11.95% this year through November, while the average energy-stock fund is off 13.55% and Energy Select Sector SPDR, which tracks an index of energy stocks, has dropped 8.49%, according to Morningstar. Over the past five years, the Fidelity fund has returned 6.32%, trailing the SPDR ETF but ahead of the average 2.9% gain of funds in the group.

As evidence of the new dynamic among energy stocks, Mr. Dowd points to the multiyear period starting in 2010, during which natural-gas prices plunged by roughly two-thirds at their lows. Ordinarily that would have been devastating for drilling stocks as the price of the gas they produced collapsed. Instead, shares of some of the gas drillers held by the fund soared. One was Noble Energy Inc., which went from a low around $30 in June 2010 to around $48 in April 2012.

"The idea that you could invest in a low-cost natural-gas company growing production at 40% and actually making money in a declining price environment would have been heresy," says Mr. Dowd. "But it worked."

The trick, he says, is to "get the cost structure right, and own either the companies lowest on the cost curve or else the companies that are driving the costs lower." He says this means investors have to be selective when it comes to U.S. exploration-and-production firms, where costs at many producers are still trending higher despite technology advances.

At the same time, most of the new production is coming from just a handful of regions, most notably North Dakota and West Texas. "It's not as if every company owns these resources and also manages costs lower," he says.

Among other stocks in the fund that he says are benefiting from this strategy of focusing on costs are EOG Resources Inc., Anadarko Petroleum Corp. and Cimarex Energy Co.

As for oil prices, Mr. Dowd says he simply isn't sure where they will settle. At $110, where oil was late last year, production jumps, he says. Below $80, production may slow but he expects demand to accelerate. That, he says, would suggest oil holding largely in that range. But, he says, "I'm not spending all my time focused on the wiggles of crude."

Send questions and comments to Mr. Lauricella at

Credit: By Tom Lauricella

Subject: Energy industry; Petroleum industry; Costs; Prices; Stocks; Natural gas

Location: United States--US

Company / organization: Name: Noble Energy Inc; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633962156

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633962156?accountid=7117

Last updated: 2017-11-21

Database: The Wall Stree t Journal

Corporate News -- The Week Ahead: Oil Trains at Junction in North Dakota

Author: Dawson, Chester

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Dec 2014: B.2.

ProQuest document link

Abstract:

[...]of those concerns, both U.S. and Canadian federal authorities have ordered new crude oil tests using methods designed to prevent dissolved gases, known as light ends, from escaping before and during testing.

Links: 360 Link to Full Text

Full text:

Energy producers in North Dakota are expected to face new regulations soon on treating their crude oil if the state's chief energy regulator follows through this week on promised standards aimed at ensuring that Bakken Shale crude oil can be more safely shipped by rail.

Some activists in North Dakota and a growing chorus of leaders in local municipalities and other states have raised questions about the safety of Bakken crude-by-rail shipments in the wake of a series of fiery train explosions, including one in July 2013 that killed 47 people in a Quebec town.

The Wall Street Journal reported in February that based on an analysis of data collected at a pipeline in Louisiana, Bakken Shale had a far higher vapor pressure -- making it much more likely to emit combustible gases -- than dozens of other crude oils.

As a result of those concerns, both U.S. and Canadian federal authorities have ordered new crude oil tests using methods designed to prevent dissolved gases, known as light ends, from escaping before and during testing.

---

The Week Ahead looks at coming corporate events.

Credit: By Chester Dawson

Subject: Crude oil; Petroleum industry; Shipping industry; Crude oil prices; Hydraulic fracturing

Location: United States--US North Dakota

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.2

Publication year: 2014

Publication date: Dec 8, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633981471

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633981471?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Weak Oil Prices Will Hurt Bahrain, Oman Credit: Moody's; Oil's Fall Puts Increasing Pressure on Persian Gulf Producers' Strained Finances, Says Moody's

Author: Fitch, Asa

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

DUBAI--Weaker oil prices will adversely affect the sovereign credit profiles of Bahrain and Oman, because of the Persian Gulf countries' strained government finances and limited financial reserves, Moody's Investors Service said in a report on Monday.

Links: 360 Link to Full Text

Full text:

Crude oil futures for delivery in Januaryin New York late last week, reaching a five-year low and extending a slide that began this summer, when the commodity traded above $100 a barrel.

The fall has fueled concerns that Persian Gulf producers' oil-funded government finances could come under increasing pressure, forcing them to cut spending or run large deficits. Most Gulf countries need oil to trade at above $75 a barrel this year to sustain current spending levels, according to the International Monetary Fund.

Bahrain and Oman are especially vulnerable because they need oil prices to stay high and don't have large financial backstops to pay for budget deficits, meaning they would likely have to borrow money if prices continue to slide, Moody's said.

The IMF estimates Bahrain needs a $125-a-barrel oil price this year to balance its budget without spending adjustments, while Oman needs the price to average $99 a barrel. Moody's estimates oil prices to average between $80 and $85 a barrel next year.

Among the four other Gulf countries--Saudi Arabia, Kuwait, Qatar and the United Arab Emirates--Kuwait and Qatar would be most resilient to a period of lower oil prices, Moody's said, due to their large reserves and muted spending relative to energy revenues.

Saudi and the U.A.E. are somewhat more strained, Moody's said, in part because of a massive ramp-up in spending in recent years. Following Arab Spring unrest elsewhere in the Middle East, Persian Gulf countries went onon hospitals, schools, infrastructure and housing for citizens to forestall domestic unrest.

The ratings agency now expects Saudi, the world's second-largest oil producer after the U.S., to run a fiscal deficit in 2015.

Persian Gulf governments would respond to lower oil prices by curtailing spending, slowing down large projects and looking at subsidy reform, Moody's said. Raising existing taxes could also be in play as a revenue-generating measure.

Write to Asa Fitch at

Credit: By Asa Fitch

Subject: Petroleum industry; Prices; Budget deficits; Crude oil

Location: Oman Bahrain Qatar Kuwait Persian Gulf

Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633983376

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633983376?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

South African Rand Hurt by Current-Account Deficit; Weak Oil Prices Haven't Had the Current-Account Impact Economists Expected

Author: McGroarty, Patrick

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

PRETORIA, South Africa--South Africa's rand dropped to a six-year low on Monday after government data showed that weak oil prices haven't helped the energy-importing nation narrow its wide current-account deficit as much as economists had hoped.

Links: 360 Link to Full Text

Full text:

The rand traded near 11.50 to the dollar on Monday morning, down more than 1% from Friday and extending the currency's 10% plunge this year.

The currency tanked after the South African Reserve Bank said the country's current-account deficit was equal to 6% of gross domestic product in the third quarter. That was better than the 6.3% gap recorded in the second quarter but worse than the 5.8% deficit economists expected.

South Africa imports the oil it uses to power vehicles and run diesel electricity generators, so a 40% drop in Brent Crude prices since June is a boon to the government, businesses and individuals alike. But broadly softer demand for commodities also weighed on the value of South Africa's gold and iron-ore exports, the central bank said, tempering the positive effect.

Africa's most sophisticated economy is expected to grow just 1.4% this year, extending a three-year deceleration. The official unemployment rate is hovering above 25%. Long and sometimes violent strikes weighed on output this year and the country's dilapidated power plants have prompted rolling blackouts that officials say could continue for a year or more.

"The continued sluggish economic growth bodes ill for the trajectory of government tax revenue, the fiscal deficit and government debt," the bank wrote in its quarterly report on the economy.

Moody's Investors Service in November cut South Africa's foreign debt rating by one notch to Baa2, saying the power shortages and labor turmoil had eroded its creditworthiness. Fitch Ratings is due to release its latest assessment of the country's creditworthiness on Friday.

"The outlook for future growth is weak," Razia Khan, an economist at Standard Chartered, wrote in a note to clients. "Coming ahead of the Fitch Ratings review of South Africa on Friday, this will only add to the list of negatives currently facing South Africa."

Write to Patrick McGroarty at

Credit: By Patrick McGroarty

Subject: Economic growth; Gross Domestic Product--GDP

Location: South Africa

Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: South African Reserve Bank; NAICS: 522110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633984820

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633984820?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Tumble in Oil Prices Spurs New Bets on Global Growth

Author: Talley, Ian

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Dec 2014: A.1.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Officials at the International Monetary Fund, U.S. Federal Reserve and European Central Bank have in recent days shrugged off concerns that the tumbling cost of crude signals a global slowdown. Instead, they project cheaper oil will be a shot in the arm for the world economy overall, especially countries with high energy tabs.

Stanley Fischer, vice chairman of the U.S. Federal Reserve, called it a "supply shock" that will help the U.S. "It's more likely to increase GDP than reduce it," he said.

"The effect is unambiguously positive," European Central Bank President Mario Draghi declared after the bank's monthly meeting last week.

Some economists warn that the nearly 40% plunge in crude-oil prices in recent months is more a harbinger of gloom as Europe flirts with recession, Japan tries to recover from its own slump and China's slowing growth risks morphing into a steeper pullback. Indeed, historically, sharp drops in oil prices tend to be associated with recessions as energy demand collapses.

This time, though, a range of supply-boosting factors is shifting the calculus for many officials and economists -- from advanced drilling techniques to a revival in Libyan oil supply and a bid by some Middle Eastern producers to price competitors out of the market.

Whether the recent price tumble is driven more by a supply glut or a drop in demand could determine the direction of the global economy in the coming year.Falling energy prices are clearly hurting major oil exporters such as Iraq, Algeria and Nigeria that rely heavily on petroleum revenues. It is particularly bad news for countries such as Russia, Venezuela and Iran already facing deep economic problems.

But for major oil importers such as Japan, Italy and Germany, the IMF calculates the price plunge since June could add nearly a percentage point of gross domestic product to their economies.

So far, Japan's economy remains in the doldrums. It contracted for the second straight quarter in the July-to-September period, revised data released Monday showed. GDP shrank an annualized 1.9% from the previous three-month period as private consumption showed little sign of life.

The IMF is raising its forecast for U.S. growth next year to 3.5% from its last estimate of 3.1%, in part because of expected lower energy costs. "There will be winners and losers, but on a net-net basis, it's good news for the global economy," said IMF Managing Director Christine Lagarde at The Wall Street Journal CEO Council meeting last week.

Research group IHS Global Insight says the average U.S. household should have an extra $750 in its pockets over the next year compared with the last 12 months, if prices hold.

One risk for policy makers: Viewing the drop in oil prices as a net positive could cloud an underlying sluggishness in the global economy.Key emerging markets from Brazil to South Africa to India have been struggling for more than a year.

"It seems unreasonable to think that the industrial engine of the emerging markets is somehow disconnected from the consuming engine of the developed world," Mr. Book said.

Economists generally agree the current drop is partly due to anemic growth in Europe and a slowdown in China. But the IEA and other experts say outsize oil production is largely behind the decline.

Advanced drilling techniques have allowed the U.S., Canada and other producers to ramp up production. Meanwhile, Saudi Arabia, Qatar and other OPEC member countries have kept their wells running. Since May, nearly 700,000 barrels of crude oil a day of unplanned OPEC production have come back online, largely in Libya.

Japan, which spent around 3.6% of its GDP to pay for its oil imports in June, stands to be a big beneficiary. The drop in oil prices cuts the country's crude bill by nearly 1.2% of GDP.

Credit: By Ian Talley

Subject: Central banks; Petroleum industry; Prices; Economic development; Recessions; Economic growth; Gross Domestic Product--GDP; Economists; Economic forecasts

Location: United States--US China Japan Europe

Classification: 9180: International; 1110: Economic conditions & forecasts

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.1

Publication year: 2014

Publication date: Dec 8, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, Ne w York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633988805

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633988805?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Retail Stocks Rally on Cheaper Oil --- Investors Wager Low-Income Shoppers Have More to Spend at Big-Box Stores; Valuations Get Pricier

Author: Scaggs, Alexandra

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Dec 2014: C.1.

ProQuest document link

Abstract:

Auto-parts retailer O'Reilly Automotive Inc. is up 25%, Costco Wholesale Corp. has added 14% and Wal-Mart Stores Inc. has risen 10% since Sept. 30.

Links: 360 Link to Full Text

Full text:

Money managers are homing in on consumer-focused stocks following a sharp decline in oil prices that stands to improve U.S. household finances, though some warn that the biggest gains in those shares may already be history.

Shares of retail giant Target Corp. have gained 18% this quarter, compared with a 5.2% advance by the S&P 500. Auto-parts retailer O'Reilly Automotive Inc. is up 25%, Costco Wholesale Corp. has added 14% and Wal-Mart Stores Inc. has risen 10% since Sept. 30. In their latest profit reports, each cited falling gasoline prices as a positive for earnings.

Ms. Vitrano owns Target shares, and thinks the Minneapolis-based retailer's sales should get a boost from the decline in gas prices.

U.S. crude-oil prices have fallen 39% since June amid flagging global demand and a strengthening dollar. On Friday, crude futures settled at $65.84 a barrel.

Retail gasoline prices in the U.S. were down 17% on Friday from a year earlier, at an average $2.711 a gallon, according to auto club AAA.

The recent declines should put at least an extra $40 billion in U.S. consumers' pockets in the fourth quarter of this year, according to an Oct. 27 report from Morgan Stanley. That would translate into about $42 a person each month, based on population estimates from the U.S. Census Bureau.

That cash packs a bigger punch with lower-income consumers. Families with annual income below $50,000 spent, on average, about one-fifth of their earnings on energy in 2012, according to Bank of America Merrill Lynch.

By contrast, energy-equipment and -services stocks in the S&P 500 are down 21% in the fourth quarter.

But some investors already are warning that the rally has brought shares of retailers favored by low-income consumers to pricey levels.

"There are probably more gains to come, . . . [but] you probably need to be a little more selective," said Paul Karos, a portfolio manager with Denver-based Whitebox Mutual Funds, which manages more than $1 billion. "The big, quick bounce has already happened."

The stocks in the SPDR S&P Retail exchange-traded fund are trading at 22 times analysts' expected earnings for the next year, according to FactSet, above their 10-year average of 16.

"If [the economy] keeps adding jobs, there are more people to spend," said Ralph Segall, chief investment officer of Chicago-based Segall Bryant & Hamill, which manages $9 billion.

To be sure, falling gas prices are no panacea. Consumers are still pinched by soft wage gains and many still have yet to find full-time work.

And within retail, not everyone has managed to capitalize. Shares of some teen-apparel retailers have fallen. Aeropostale Inc., for example, is down 25% this quarter, and tumbled 22% on Thursday, when it cut its forecasts for 2015. Abercrombie & Fitch Co. also recently lowered its estimates for 2015 profit. Its stock is down 25% this quarter.

Credit: By Alexandra Scaggs

Subject: Abreast of the market (wsj)

Classification: 9190: United States; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.1

Publication year: 2014

Publication date: Dec 8, 2014

column: Abreast of the Market

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633988810

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633988810?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Falls to New Lows; Prices Skid on Weaker-than-Expected Economic Data in China and Japan

Author: Friedman, Nicole; Copeland, Rob

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

A decision by the Organization of the Petroleum Exporting Countries last month to maintain its production ceiling further cemented a belief among investors, analysts, oil-company executives and industry officials that the world will remain awash in crude well into 2015. Mr. Textor, whose Syosett, N.Y., firm manages roughly $700 million overall, had heavy bets on exploration-and-production companies such as Anadarko Petroleum Corp. and Pioneer Natural Resources Co., and he held bullish related positions amounting to more than four times the value of his bearish ones heading into the month, the document shows.

Links: 360 Link to Full Text

Full text:

Oil prices skidded to fresh five-year lows Monday, as lackluster readings on Asian economies and a price cut by Iraq heightened concerns about a global supply glut.

While oil's fall has hurt the finances of oil-exporting nations, it has been a boon for consumers and is likely to provide a tailwind for global growth. The drop in prices also has rattled currency markets, prompted some energy companies to reduce spending and hammered energy stocks.

U.S. oil prices ended $2.79, or 4.2%, lower at $63.05 a barrel on the New York Mercantile Exchange, the lowest level since July 16, 2009. Nymex oil futures are down 36% this year.

Brent crude, the global benchmark, fell $2.88, or 4.2%, to $66.19 a barrel, the lowest level since Sept. 29, 2009. Brent is down 40% in 2014.

The decline extends a six-month selloff in crude driven by rising production in the U.S. and elsewhere. The tumble in oil began overnight but accelerated during the New York trading day.

The average per-gallon price of regular gasoline in the U.S. is $2.67, the lowest since February 2010, according to AAA. The motor club predicted Monday that the national average could fall to $2.50 a gallon or lower by the end of the year.

The sharp move in crude oil weighed on shares of energy companies, helping send major U.S. stock indexes lower. The Dow Jones Industrial Average lost 106.31 points to 17852.48.

A benchmark U.S. oil price below $65 a barrel poses challenges for oil companies drilling in shale-rock formations, the source of the U.S. oil boom, some analysts say. Certain operations will be money-losing with oil below that mark, they say.

"It's getting close to the marginal cost for shale production in North America," said Michael Hiley, an energy trader at brokerage LPS Partners Inc. "I think guys are very nervous."

Iraq on Monday for Asian and American buyers, but it raised it for European customers, in line with similar moves earlier this month by Saudi Arabia, the world's largest oil exporter. Market watchers say these price cuts indicate producers' desire to protect their market share during the downdraft, a stance that is likely to result in a steady flow of barrels.

Saudi Arabia's King Abdullah announced a shake-up of the kingdom's government Monday but kept veteran oil minister Ali al-Naimi in place. Mr. Naimi was instrumental in OPEC's decision to maintain its production target.

Producers and traders are scrambling to find buyers at a time of a slowdown in Asia, which previously had been hailed as the growth engine for the oil market and a justification for triple-digit prices. Data released Monday showed Japan's economy contracted 1.9% in the third quarter, more than previously estimated, while Chinese export growth fell below expectations and imports fell. China and Japan are the world's No. 2 and 3 oil-consuming nations after the U.S.

China and Japan represent "two big chunks of global energy consumption," said Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates. Despite a brighter outlook in the U.S., underscored by Friday's stronger-than-expected jobs report, "we're still seeing weakness out there in other key consuming regions of the globe."

The jostling markets have put some specialized traders in a pinch. Former Goldman Sachs Group Inc. partner Don Textor saw his Dorset Energy Fund Ltd. crater nearly 16% in November, its third consecutive month of escalating losses, according to an investor update and person familiar with the firm.

Mr. Textor, whose Syosett, N.Y., firm manages roughly $700 million overall, had heavy bets on exploration-and-production companies such as Anadarko Petroleum Corp. and Pioneer Natural Resources Co., and he held bullish related positions amounting to more than four times the value of his bearish ones heading into the month, the document shows.

The fund is now down more than 20% for the year. The firm didn't respond to requests for comment.

Some hedge funds have profited from oil's fall. Winners include the pair of George "Beau" Taylor and Trevor Woods. The duo's $1 billion Taylor Woods Capital Management LLC rose 6% last month, putting it up roughly 11% for the year, pressing bets that prices in the futures market would fall, a person familiar with the fund said.

The Greenwich, Conn., firm's recent success helps erase paper losses from the first half of the year and will be a boon to Blackstone Group LP. The New York buyout shop staked the fund with startup cash in 2011 in return for a cut of fees earned going forward, people familiar with the arrangement said.

Morgan Stanley analysts on Friday lowered their projections for Brent crude prices through 2018. The analysts now see benchmark Brent prices averaging $70 a barrel in 2015, down from their previous estimate of $98 a barrel.

Big oil-producing countries both inside and outside OPEC are feeling the hit from falling prices in the form of faltering growth and tumbling currencies. Central banks in some countries, such as Russia, have intervened to stem the weakness. Mexico on Monday was the latest to unveil a policy of intervention, saying its central bank would sell dollars to support the peso on days the currency weakens 1.5% or more against the dollar.

Some corners of the oil market are anticipating a rebound in prices. As a group, money managers increased their bullish position on Brent crude by 47% in the week that ended Dec. 2, according to exchange operator Intercontinental Exchange Inc. In the Nymex futures market, investors also upped their aggregate bullish bets, although on a smaller scale, according to the U.S. Commodity Futures Trading Commission.

Some analysts said the increased bullishness suggests prices could hit a bottom soon. However, most of the week-on-week change came from money managers closing out bets on lower prices, rather than adding new bets that prices would rise.

"It's not that they're guessing that prices have bottomed--it's that they're adjusting their exposure" to lock in profits as prices fall, said Tim Evans, an analyst at Citi Futures Perspective.

Market participants are trying to determine whether non-OPEC producers will reduce production to shrink the global glut of oil.

ConocoPhillips said Monday it planned to cut capital spending by 20% next year, citing deferred spending on unconventional drilling in North America. Other producers have reduced their capital-spending plans as well. However, the Houston company said it expects its oil output to increase in 2015.

Despite disclosures by ConocoPhillips and other oil companies about scaled-back investment plans, the total number of rigs drilling for oil in the U.S. rose by three in the week ended Dec. 5, according to a weekly count from oil-services firm Baker Hughes Inc.

The rig count "showed an uptick in U.S. drilling activity at a time when the market really wants to see some cutback in drilling," Mr. Evans said. "You're looking at a substantial first-half 2015 surplus that nobody's done a thing to trim."

U.S. oil supplies are expected to fall later this month as refiners draw down inventories for year-end tax purposes, which could give a temporary boost to prices, said Tariq Zahir, managing member at Tyche Capital Advisors. That could be keeping some traders on the sidelines, he said.

"With this level of volatility in the market, you don't really want to risk too much on your gains for the year," Mr. Zahir said.

January reformulated gasoline blendstock, or RBOB, settled down 6.68 cents, or 3.8%, at $1.7066 a gallon, the lowest level since Sept. 29, 2009.

January diesel slid 5.29 cents, or 2.5%, to $2.0549 a gallon, the lowest settlement since Sept. 1, 2010.

Anthony Harrup, Sarah Kent and Summer Said contributed to this article

Write to Nicole Friedman at and Rob Copeland at

Credit: By Nicole Friedman And Rob Copeland

Subject: Petroleum industry; Price cuts; Statistical data; Energy industry

Location: Iraq

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1633993924

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633993924?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

ConocoPhillips Cuts Drilling Budget by 20%; Move Comes as Oil Companies Scale Back Plans Amid Lower Crude Prices

Author: Gilbert, Daniel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

ConocoPhillips said it would cut capital spending by 20% next year to $13.5 billion, a sign that major oil companies are treating the as more than a temporary dip.

U.S. oil prices on Monday, falling below $64 a barrel in midday trading, and they are down nearly 40% since this year's peak in June. The steep drop in prices has come as energy companies prepare their annual budgets, and analysts expect much of the industry to scale back spending as cash flow shrinks.

Houston-based ConocoPhillips is the first of the big, U.S.-based international oil producers to disclose its 2015 spending plans. The company said it would cut back on exploring for new sources of oil and gas, as well as on drilling in some shale formations in North America, including the Niobrara in Colorado.

Ryan Lance, chief executive of ConocoPhillips, said the lower spending "is prudent given the current environment." The company also will spend less on some of its largest projects that are nearing completion, and estimates it will pump 3% more oil and gas in 2015 than in 2014.

Even if its oil and gas output grows more slowly than in the past, Conoco "is committed to live within its means," said Roger Read, a Wells Fargo Securities analyst.

Shares of ConocoPhillips, the third-largest U.S. oil producer by revenue, fell more than 3% on Monday as falling crude prices continued to drive shares of oil producers lower.

The collapse in oil prices to the lowest levels in five years leaves oil and gas producers with less money to spend on drilling, dividends and in some cases programs to repurchase their shares.

Analysts at Sanford C. Bernstein on Monday estimated that a 35% drop in oil prices would result in a 25% decrease in industry cash flow. But they forecast that crude prices would eventually rise as companies cut back on drilling.

In the near term, however, less spending by oil producers spells gloom for oil-field service companies and contractors including Schlumberger Ltd. and Transocean Ltd., whose revenues depend on drilling activity. Halliburton Co. and Baker Hughes Inc. last month , forming the second-largest oil-field services firm after Schlumberger.

Schlumberger, which operates onshore and offshore in 85 countries around the world, said last week that it would be reducing its workforce and retiring some of its seafaring vessels.

"We do expect lower exploration activity levels to carry forward into 2015," Patrick Schorn, Schlumberger's president of operations and integration, said at a Cowen and Co. energy conference. He cited "a very strong focus from our customers on short-term cost cutting."

It isn't just capital spending that is likely to get trimmed. Analysts who met with Chevron Corp. management last week predicted that the company would spend less on repurchasing its shares. Chevron executives also have expressed a willingness to delay investments in major projects as the company seeks to lower costs.

"Chevron is still in the process of reviewing and evaluating its capital and exploratory expenditure plans and will release its 2015 budget as soon as these plans are final, most likely in early 2015," Chevron spokesman Kurt Glaubitz said.

Dan Molinski contributed to this article.

Write to Daniel Gilbert at

Credit: By Daniel Gilbert

Subject: Petroleum industry; Cash flow; Executives; Capital expenditures; Crude oil prices; Energy industry

Location: United States--US

Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990; Name: Transocean Ltd; NAICS: 213111, 213112

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634172321

Document URL: htt ps://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634172321?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Trafigura Expects Rise in U.S. Oil Trading in 2015; Commodities Trader Says Traded Volumes Could Double Next Year

Author: Kent, Sarah

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

Trafigura believes its business model, combining investment in infrastructure with trading expertise, has allowed it to weather difficult conditions for trading houses which have faced stagnant markets, increased competition and calls for greater transparency around its business models.

Links: 360 Link to Full Text

Full text:

LONDON--Trafigura Beheer B.V. expects to significantly increase its oil trading in the U.S. next year, despite the recent that has put the profitability of many oil projects in the country in doubt.

The privately-owned commodities trader said Monday that its volume of trades from two substantial shale oil formations in Texas could double next year, building on similar growth in 2014.

Trafigura, which typically turns a profit by buying commodities like oil from producers and selling it on to consumers wherever it can get the highest price, generated 12% of its revenue from oil and oil products trading in North America last year, up from 10% a year earlier.

Trafigura disclosed its U.S. expansion expectations as it reported net profit of $1.1 billion for the year ended Sept. 30, 2014, down 50% compared with a year earlier. The profit plunge was mainly due to the divestment of oil storage firm Puma Energy, which Trafigura spun off after selling a large stake in the company last year.

Trafigura has grown rapidly in the U.S. where oil production, has boomed in recent years. In 2012, it bought an 85-acre oil terminal at Corpus Christi, Texas, but sold down 80% of its stake earlier this year; retaining the commercial rights to use the infrastructure for trading. It has also completed the conversion of a 100,000 barrel a day natural gas pipeline in Texas that will allow it to transport crude oil and condensate.

Despite the dip in headline figures, Trafigura said its gross profit margin had improved to 1.6% from 1.4%, while its traded volumes rose to 169.5 million metric tons from 150.7 million metric tons in 2013. Stripping out divestments of previously consolidated subsidiaries, including Puma Energy, the company's earnings before interest, tax, depreciation and amortization rose 13% in 2014 to $1.3 billion.

"This was a creditable performance in challenging trading conditions," Chief Executive Jeremy Weir said in a statement.

The company said it had also carried out a substantial share buyback program, handing back almost $900 million to management and senior employees in the past year.

The trading house, which is owned by 600 employees and its management, regularly engages in significant share repurchase programs as a way of redistributing profits. It plans to purchase stock worth $1.3 billion from its staff between 2015 and 2018, subject to compliance with financial covenants on its debt.

Write to Sarah Kent at

Credit: By Sarah Kent

Subject: Petroleum industry; Corporate profits; Corporate planning; Petroleum production

Location: United States--US Texas North America

Company / organization: Name: Puma Energy Inc; NAICS: 211111, 213112

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634191342

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634191342?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Investors Bet on Recovery in Oil Prices; Positions Taken on Expectations of Rising Brent Crude Prices Increase by 47% in Past Week

Author: Rai, Neena

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

Net long positions taken by large investors that the price of Brent crude oil would rise increased by 47% over the past week, according to the Intercontinental Exchange Inc. Net long positions are calculated by the total number of bets that the price of oil would rise minus the number of bets that it would fall.

Links: 360 Link to Full Text

Full text:

LONDON--As oil prices continue to plunge, investors are already busy laying bets over a broader recovery in prices.

It is the highest net long position in four months, according to the data.

Investors increased the number of long positions--or bets that prices will rise--held by 11,391 positions to 212,075 as of Dec. 2, according to the latest Commitment of Traders report from the ICE. They cut the number of short positions--bets that the crude oil price would fall--by 19,912 to 114,799, it said.

Jack Malone, futures and options adviser at Chicago-based RCM Asset Management, said that oil prices may yet fall in the near-term, as investors fret about the huge volumes of oil sloshing around in global markets.

"Near term, I do believe that oil prices have lower to go because of the oversupply situation, yet the rising bets in Brent could reflect good opportunities in longer-term positions," said Mr. Malone, who declined to discuss RCM's investments in oil. RCM Asset Management has $80 million under management.

Oil prices slumped after the Organization of the Petroleum Exporting Countries opted on Nov. 27 to despite the near 30% decline in prices since June and the ample supplies available in global markets.

That sent the oil market into a frenzied bout of selling, and prices declined an additional 10 percentage points. Brent crude oil for January fell further on Monday. In early-afternoon trading in London the price was down 2.4% at $67.43 a barrel--a .

Data published last Friday confirmed the increase in long positions. Investors in the Nymex market boosted their wagers that prices for WTI crude oil, the U.S. benchmark, could go up. Money managers added 9,807 wagers on rising prices while slashing 12,557 bets that prices would fall, according to data from the Commodity Futures Trading Commission published on Friday.

Tariq Zahir, managing member of New York-based Tyche Capital Advisors, cautioned against reading too much good news into the data. The market may already have swung back sharply given the collapse of prices since the Nov. 27 decision, said Mr. Zahir. Tyche's positions are skewed toward prices falling further, he said, adding that he believes the net long positions could have reversed just as quickly in the week since Dec. 2.

"Let's not forget this data is backward looking," said Mr. Zahir. "In a normal market, this could signal a potential recovery in Brent, but by now I wouldn't be surprised if these positions have already been taken off by investors."

ICE's Commitment of Traders report is published every Monday with data from the previous Tuesday.

Morgan Stanley on Monday lowered its forecasts for crude oil prices for the next five years, reiterating some concerns that the supplies are likely to keep prices down for some time.

For its base-case scenario, the U.S. bank sees oil averaging $70 a barrel during 2015, down nearly $28 from its previous forecast. In a worst-case scenario, prices next year could be down 38% on average. The bank sees prices gradually recovering to an average of $100 a barrel in 2017, but this is only $4 below the previous forecast.

Still, Morgan Stanley's Adam Longson said he doesn't see stress levels matching those of prior oil crises. "Estimates of the oversupply are vastly overstated versus true crude balances," said Mr. Longson in a research note.

Write to Neena Rai at

Credit: By Neena Rai

Subject: Crude oil; Crude oil prices; Petroleum industry; Asset management

Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Commodity Futures Trading Commission; NAICS: 926140, 926150

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634192636

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634192636?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

In a Year of Setbacks for Obama, Low Oil Prices Bring Hope; White House to Reap Economic Benefit at Home, Strategic Advantage in Many Geopolitical Hotspots

Author: Seib, Gerald F

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

The macroeconomic benefits will be offset somewhat by lower activity in the oil-drilling sector, which has been booming, but many analysts score the price drop as a net plus for the U.S. The international effects are even more tantalizing for the Obama White House. Bonus for the White House: Maybe the additional economic squeeze will convince Congress it doesn't need to impose new economic sanctions on Iran, which the Obama administration fears would blow up those nuclear negotiations with Iran.

Links: 360 Link to Full Text

Full text:

Even President Barack Obama likely would agree that 2014 has been a tough year for him--and he doubtless would welcome a sign that he will catch a break or two in 2015.

Well, here's one: Low oil prices now appear likely to be with us deep into next year, at least, and they are shaping up as a win-win for the president.

It's hard to imagine a single development that carries so many upsides and so few downsides. The domestic economic benefits are obvious; more intriguing but less obvious are the ways low oil prices benefit American strategy around the world.

It just happens that the countries hurt most by the oil-price decline are on the current U.S. naughty list, from Iran and Syria to Russia and Venezuela. Meanwhile, many obvious economic and strategic beneficiaries--Jordan, Egypt, Israel and Japan among them--are on the nice list. It is a geopolitical game-changer.

The effects are truly meaningful only if the current oil-price dip is sustained for a while, but most observers think it will be. Global supply outstrips demand by perhaps a million barrels a day right now, and the world's most powerful oil producer, Saudi Arabia, has indicated it doesn't intend to cut production to soak up the excess. That has pushed oil prices to $65 a barrel or so, down from more than $100 just five months ago.

"We see the current oil glut as long term, with $100-plus prices not being reattained until the end of the decade," wrote Doug Handler, chief U.S. economist for IHS, in an analysis late last week. That implies gas prices "well below" $2.50 a gallon by early next year, a move that will save the average American household $750 over the next year, he added.

That should translate into a boost to consumer confidence and spending, in an economy already showing new signs of progress. The macroeconomic benefits will be offset somewhat by lower activity in the oil-drilling sector, which has been booming, but many analysts score the price drop as a net plus for the U.S.

The international effects are even more tantalizing for the Obama White House. For starters, low oil prices can help stimulate growth in Europe just as its sluggishness has emerged as a deep worry.

The drop also wounds Russia and Iran, deeply and inescapably dependent on oil income. Both already are under economic pressure from American-orchestrated international sanctions, Russia because of its incursion into Ukraine and Iran because of its nuclear program. Lower oil prices have the effect of putting those sanctions' effects on steroids.

The combined effect on Russia will be "very profound," says one senior U.S. official, "and we've already seen them downgrade projections for growth, and they may be heading into a recession." Russian President Vladimir Putin is in a box; he faces significant costs to consolidate his takeaway of the Crimean Peninsula from Ukraine, is paying most of the costs incurred by Ukrainian separatist forces and is promising a defense buildup to boot. "There are going to have to be trade-offs," the U.S. official predicts.

Iran's predicament is similar and, from the American point of view, particularly well timed. The Obama administration has perhaps three months to pressure Iran into a long-term deal restricting its nuclear program. Only economic pressure has brought such a deal into view, and the pinch on Iranian oil revenues now will escalate the pressure at precisely the right time.

Bonus for the White House: Maybe the additional economic squeeze will convince Congress it doesn't need to impose new economic sanctions on Iran, which the Obama administration fears would blow up those nuclear negotiations with Iran.

Iran's allies in the Middle East are hurt as well. Syria is dependent on both its own modest oil income and Iranian largess. Iranian petrodollars also finance Hezbollah. Both have some new worrying to do.

Similarly, the radical Islamic State's army has been financing itself in part by stealing oil from Syrian refineries and selling it on the black market. The value of such oil, already deeply discounted, is sinking further. Meantime, the nations the U.S. would like to see stabilized in the Middle East--Egypt, Jordan and Lebanon--all get some relief. The only downside, which is worrisome, is the effect on Iraq's oil income.

In this hemisphere, nobody is hurt more than oil-producing Venezuela, the regional epicenter of anti-American agitation. Also pinched are Venezuelan beneficiaries, principally Cuba. "The Venezuelans," says the senior U.S. official, "are in deep trouble."

As it happens, much of this is attributable to the Saudis' decision not to cut their output. The Saudis are acting for their own reasons, but it's nice that President Obama and Saudi leaders, who have had their tensions lately, agree on the global benefits on this one.

Write to Gerald F. Seib at

Credit: By Gerald F. Seib

Subject: Petroleum industry; Sanctions; Prices; Recessions; Presidents

Location: Jordan United States--US Egypt Russia Iran Syria Venezuela

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: US

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: Un ited States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634213885

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634213885?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

BP's Cuts Show Big Oil Needs to Lose Heft; Other Major Companies Are Likely to Slim Down Operations

Author: Thomas, Helen

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

With nearly 40% since June, oil and gas companies face a tougher time covering their investment spending and payments to shareholders with operating cash flow.

Links: 360 Link to Full Text

Full text:

A little excess weight can help through lean times. But slimming down is what is needed for the biggest oil and gas companies trying to weather the storm of lower oil prices.

With nearly 40% since June, oil and gas companies face a tougher time covering their investment spending and payments to shareholders with operating cash flow. Some is likely. But Big Oil also will need to next year. BP is set to cut jobs as part of its latest restructuring efforts. Others are likely to follow suit.

Companies such as BP, Royal Dutch Shell and Total have in the past year embraced a mantra of spending discipline and return on investment rather than chasing growth at any price. But they can arguably do more in trimming their operating costs: These add up to $180 billion a year for the European majors, nearly 20% higher than their investment spending, according to Barclays.

The ranks employed in the upstream operations of oil and gas companies have continued to rise in recent years, even as production has flatlined or started to fall. At BP, which had to overhaul its operations following the Macondo oil spill in 2010, the number of upstream employees rose 17% from 2010 to 2013. Production, excluding associates, has dropped by a fifth. So BP's production per upstream employee, one measure of efficiency, was nearly a third lower in 2013 than three years previously.

It is a similar story elsewhere. Upstream head count at France's Total crept up 6% over the same period, but falling output, when excluding its stake in Russia's Novatek, meant production per head dropped 17%. At Shell, which last year reported higher staff numbers after an accounting change, production per member of upstream staff has also fallen, down close to a fifth.

On the face of it, there may be more chopping to be done in Europe than in the U.S. The U.S. companies don't break out their upstream employee numbers. But Exxon Mobil's total head count, excluding service station staff, has fallen from 83,600 in 2011 to 75,000 last year. France's Total employed close to 100,000 people last year, though it produced roughly half the oil and gas that Exxon did.

U.S. companies may have done a better job of cutting costs as they have streamlined operations. But Europe's major oil companies certainly face greater political pushback when trying to restructure operations and shed staff. They also tend to have large, labor-intensive downstream refining and marketing businesses, which have made losses in recent years.

Exxon and Chevron enjoy a premium valuation compared with the European sector, in part thanks to their better profitability and efficiency. Europe's oil and gas sector will need to get leaner to stay fit in 2015.

Write to Helen Thomas at

Credit: By Helen Thomas

Subject: Petroleum industry; Natural gas utilities; Statistical data

Location: France United States--US Europe

Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634214435

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634214435?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Drop Pressures Crude-Producing Countries, Energy Firms; Oil Prices Extend Losses, Hitting Five-Year Lows

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.

ProQuest document link

Abstract:

Declines in spending by oil firms will likely further pressure companies that provide oil-field services--such as Schlumberger, Halliburton Co. and Baker Hughes Inc. --which tend to suffer when oil companies reduce spending. Net long positions taken by large investors that the price of Brent crude oil would rise increased by 47% as of Dec. 2, according to the Intercontinental Exchange Inc. Net long positions are calculated by the total number of bets that the price of oil would rise minus the number of bets that it would fall.

Links: 360 Link to Full Text

Full text:

Oil prices dropped sharply Monday , putting additional pressure on countries that rely on oil revenue and on energy companies that are trying to calibrate their investment plans.

In recent trading, U.S. oil prices were 3.8% lower at $63.29 a barrel, the lowest level in intraday trading since July 2009. Monday's skid brought year-to-date declines to roughly 35%. Brent crude, the global benchmark, fell 4.2% to $61.11 a barrel.

Oil prices have plunged for months as global supply growth has outpaced expectations while demand has been tepid. On Monday, oil prices declined steadily during the Asian and European sessions, but the selloff accelerated as the U.S. trading day got under way. U.S. oil futures, which trade on the New York Mercantile Exchange, fell 2.6% in the first hours of trading, reaching an intraday low of $63.06 a barrel.

Already, companies have been forced to make changes. ConocoPhillips on Monday from a year ago to $13.5 billion next year. The Houston-based oil giant said it plans to spend less on major projects that are nearly complete as well as defer spending on emerging shale plays in North America.

Norway's Statoil ASA said on Friday that it would suspend the operations of three oil-drilling rigs for longer than previously planned because of overcapacity. Meanwhile, Schlumberger expects to post a pretax write-down of $800 million for the fourth quarter, related to the oil-services giant's plan to reduce the size of its WesternGeco marine seismic fleet.

Continental Resources Inc., a major oil producer in North Dakota's Bakken Shale, said last month it would spend $4.6 billion in 2015, $600 million less than planned, due to lower oil prices.

Iain Pyle, an analyst with Bernstein Research, said oil companies will have to re-examine some of their big investments. If oil prices don't rebound soon, "what we're going to see is projects getting canceled," he said.

While companies in the oil industry warn of major changes to their production and expenditure plans, those leading many of the world's top economies have said the drop could be a shot in the arm for their economic forecasts. The positive spin from top policy makers in the U.S., Europe, Japan and elsewhere comes even as history has shown that sharp drops in oil prices tend to be associated with recessions as energy demand collapses.

Oil producing-countries are already hurting, especially those that rely heavily on petroleum revenue, like Iraq, Algeria and Nigeria. It is also a difficult development for countries such as Russia, Venezuela and Iran, which are already facing deep economic problems.

Driving Monday's move, data showed that , more than previously estimated, while Chinese export growth fell below expectations and imports fell. China and Japan are the No. 2 and 3 oil-consuming nations after the U.S.

China's crude-oil imports rose 5.5% in November from October and were up 7.9% year-over-year, according to Wall Street Journal calculations based on preliminary data released from the General Administration of Customs on Monday.

Declines in spending by oil firms will likely further pressure companies that provide oil-field services--such as Schlumberger, Halliburton Co. and Baker Hughes Inc. --which tend to suffer when oil companies reduce spending. All three companies traded down more than 1% in recent trading, while Exxon Mobil Corp. and Chevron Corp. traded down 1.9% and 3.3%, respectively.

In its Monday statement, Conoco said it now expects production will increase about 3% at its continuing operations, excluding those in Libya. Last month, the oil exploration and production company had said that next year's budget would fall below the $16 billion spent this year, dropping plans for some new wells in places such as Colorado's Niobrara Shale.

Further hurting oil companies, the ICE Dollar Index, which measures the dollar against a basket of currencies, rose to a multiyear high early Monday. Oil is traded in dollars, so a stronger dollar makes oil more expensive for buyers using foreign currencies.

Even so, some investors are betting on a bounce back. Net long positions taken by large investors that the price of Brent crude oil would rise increased by 47% as of Dec. 2, according to the Intercontinental Exchange Inc. Net long positions are calculated by the total number of bets that the price of oil would rise minus the number of bets that it would fall.

That bounce back would come despite little help on the way from the 12-member Organization of the Petroleum Exporting Countries, which collectively pump more than one-third of the world's oil. On Nov. 27, the group opted to maintain production levels despite the recent selloff. The decision sent the oil market into its latest bout of selling, with prices off more than 10% since the move.

Morgan Stanley expects prices to remain down for some time. On Monday, the firm lowered its forecasts for crude oil prices for the next five years. For its base-case scenario, the U.S. bank sees oil averaging $70 a barrel during 2015, down nearly $28 from its previous forecast. In a worst-case scenario, prices next year could be down 38% on average.

Ian Talley, Justin Scheck and Neena Rai contributed to this article.

Credit: By Nicole Friedman

Subject: Petroleum industry; Prices; American dollar; Recessions; Economic forecasts

Location: United States--US

Company / organization: Name: Statoil ASA; NAICS: 324110, 211111; Name: Continental Resources Inc; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 8, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634294407

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634294407?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Crude Oil's Fall Pressures Energy Megaprojects; Oil Industry's Multibillion-Dollar Investments Come Under New Scrutiny

Author: Scheck, Justin

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

Included in next year's total is $4.8 billion, or 36% of its capital budget, to start up marquee oil and gas projects in the North Sea, in Australia and Canada's oil sands. For a generation, companies including ConocoPhillips, Exxon Mobil Corp., Royal Dutch Shell PLC and Chevron Corp. focused investment and manpower on projects that took them to places including the deep waters of the U.S. Gulf of Mexico, Canada's Alberta oil sands and the Caspian Sea.

Links: 360 Link to Full Text

Full text:

Energy development projects that looked great earlier this year are looking less so now.

Tumbling oil prices hit a fresh five-year low on Monday, pressuring some of the world's biggest energy companies to reconsider multibillion-dollar expenditures. The biggest worries: megaprojects requiring billions of dollars in investment and sophisticated engineering to tap resources capable of decadeslong oil or natural gas production.

ConocoPhillips said its capital spending would fall to $13.5 billion next year, down 20% from this year's level. Included in next year's total is $4.8 billion, or 36% of its capital budget, to start up marquee oil and gas projects in the North Sea, in Australia and Canada's oil sands.

Ryan Lance, ConocoPhillips's chief executive, said the spending reduction "is prudent given the current environment." The Houston-based company will spend less on some large projects that are nearing completion, and cut back on exploring for new sources of oil and gas. It estimates it will pump 3% more oil and gas in 2015 than this year.

For a generation, companies including ConocoPhillips, Exxon Mobil Corp., Royal Dutch Shell PLC and Chevron Corp. focused investment and manpower on projects that took them to places including the deep waters of the U.S. Gulf of Mexico, Canada's Alberta oil sands and the Caspian Sea.

Such huge projects typically play to the advantages of big companies. They have the engineering expertise to develop fields beyond the grasp of smaller firms and government-owned oil companies. What's more, they need to keep adding reserves to offset production declines in mature areas. Big, long-lived fields in an era of $100-a-barrel Brent, the price that benchmark oil has fetched for much of the past few years, were a good formula for earnings gains.

Monday's price of $66.19 a barrel for deliveries next month isn't part of that equation. For Shell to consider pursuing a new project, it "must be able to break even at $70" a barrel, a spokesman said. A BP PLC spokesman said it uses "a long-term planning price of around $80" a barrel when considering new investments. Exxon Mobil Chief Executive Rex Tillerson recently said in a television interview that the company tests projects "across a range that's all the way down to $40" when considering projects. A Chevron spokesman said the company has based its "2017 production forecast on a Brent price of $110" and that it conducts a "stress test" of projects at lower price levels.

Shares of Conoco, the third-largest U.S. oil producer by revenue, fell 4.2% to $65.03 at 4 p.m. in New York trading. Exxon was off 2.3% at $91.70, Shell was off 2.3% at $65.60, and Chevron fell 3.7% to $106.80.

Oil's price drop is made more painful because of the locked-in costs of many of these projects. In the past few years, contractors such as drill-rig owners upped their rates as big companies competed for services. Some companies, including Shell, borrowed money in some recent quarters to cover combined payments for development, acquisitions and shareholder dividends, since the companies' cash flow didn't cover all of the spending. A Shell spokeswoman pointed out that the company's cash flow in its most recent quarter was up from a year earlier.

Shell CEO Ben van Beurden said early this year that its big expensive projects made it too "convoluted" for the company to give public forecasts of production or cash flow.

He and other executives said their companies needed to curb spending. Even before oil prices began falling earlier this year, companies have been delaying or canceling projects for cost worries. Chevron and BP are reviewing plans for offshore projects in the U.K. and U.S. that could cost billions of dollars.

Shell decided not to pursue a U.S. plant to turn natural gas to liquid fuel, and in July said it wouldn't continue with a gas project in Saudi Arabia.

A U.S. shale boom fueled by small companies drilling huge numbers of small wells is responsible for much of the price pressure on big companies. But that doesn't mean an end to mega projects. Big companies still need them to maintain production levels.

John England, a vice chairman at consultants Deloitte LLP who advises oil companies on development strategy, said that he expects the biggest companies to follow through with many of their projects. "They'll certainly cut back at the margins," he said. But, he added, "energy demand continues to go up and at the same time we do have decline curves on existing production."

Spokesmen for Shell and BP said the companies take long-term views when deciding whether to invest in a project and take into account oil-price volatility. Chevron's finance chief has said the No. 2 U.S. oil producer believes "global demand for oil and natural gas will grow while existing sources of supply will inevitably decline."

Still, analysts such as Bernstein Research's Iain Pyle said oil companies will have to re-examine some of their big investments. If oil prices don't rebound soon, "what we're going to see is projects getting canceled," he said.

Bernstein on Monday estimated that a 35% drop in oil prices would result in a 25% decrease in industry cash flow. But it forecast that crude prices would eventually rise as companies cut back on drilling.

A barrel of Brent traded for more than $115 on June 19.

Daniel Gilbert contributed to this article.

Write to Justin Scheck at

Credit: By Justin Scheck

Subject: Petroleum industry; Cash flow; Investments; Capital expenditures; Natural gas; Oil sands

Location: United States--US Canada

People: Tillerson, Rex W

Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634344329

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634344329?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

As Oil Falls, a Look at the Risks; Less Incentive to Develop Energy Sources; Fewer Alternatives When Demand Revives

Author: Browning, E S

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

If spending doesn't pick up much, the main benefit of lower oil prices to economic growth won't be felt, and fears of global deflation will spread. Low-end retailers such as Costco Wholesale Corp. and Wal-Mart Stores Inc. have reported some sales improvement in recent weeks, as have some restaurants, said Henry Herrmann, chief executive at Waddell & Reed Financial Inc., which oversees $130 billion in Overland Park, Kan.

Links: 360 Link to Full Text

Full text:

The oil-price decline of the past six months has been stunning.

On Monday, oil prices fell 4.2%, to settle at $63.05 a barrel in New York. Crude has fallen 41% from its 2014 high hit in June and is at its lowest level since July 2009, just after the end of the financial crisis.

Falling oil prices are thought to be good for stocks because they stimulate consumer spending and hold down inflation. The lower costs support economic growth, boost corporate earnings and lessen pressure on the Federal Reserve to raise interest rates.

The stock market loves that mix.

But falling prices aren't an unalloyed benefit. They also reduce the incentive to develop new oil and gas fields and make it less urgent to create alternative energy sources. That hurts companies in those areas and, because it makes energy less plentiful, means higher costs and fewer energy alternatives once global demand revives.

"On balance, I think it is an overwhelming positive. It is a tremendous transfer of wealth from producers to consumers," said David Joy, chief market strategist at Ameriprise Financial Inc., which oversees $810 billion. But "there is clearly a debate about this."

So far, he points out, reports on year-end consumer spending haven't been strong. If spending doesn't pick up much, the main benefit of lower oil prices to economic growth won't be felt, and fears of global deflation will spread.

Low-end retailers such as Costco Wholesale Corp. and Wal-Mart Stores Inc. have reported some sales improvement in recent weeks, as have some restaurants, said Henry Herrmann, chief executive at Waddell & Reed Financial Inc., which oversees $130 billion in Overland Park, Kan. New-car sales also have been strong, he said.

Friday's November jobs report showed a small pickup in wages, which also should help consumers.

Surveys show, however, that many consumers still feel as if the U.S. is in a recession, Mr. Joy said. Many have had little or no inflation-adjusted wage gains for years and still face significant debt, which has kept them from going back to their old spending ways.

"The general mind-set of the consumer is still very cautious. You don't see a robust start to the holiday shopping season, and the housing sector is only modestly improving," he said.

Consumers may be trying to pay down debt, which would be good for their longer-term finances but wouldn't help economic growth right away.

Fears also spread last week of a debt default by Venezuela, an oil exporter, and of further financial strains for Russia. Russia's 1998 debt default threw the financial system into turmoil, although few analysts predict a repeat.

Aside from oil-related companies, worries have focused on railroads, railcar manufacturers, leveraged bank loans and firms that supply big oil companies, Mr. Herrmann said. His firm has cut way back on holdings of junk bonds issued by energy-related companies, he said.

One bit of good news is that cuts in oil exploration and energy development occur gradually, while the benefits of lower oil prices are felt immediately, said Russ Koesterich, chief investment strategist at BlackRock Inc., which manages $4.32 trillion.

That means, however, that the pickup in exploration and development also will be gradual when it happens. That means the effects of the oil-price decline will be felt even after oil prices begin to rise again.

Part of the problem is that the price drop has been sudden and heavy, so that energy-related companies have taken a big hit for which it was hard to prepare. This has been a particular blow to smaller oil-services and equipment companies.

A Standard & Poor's index of large oil producers has dropped 21% from its June high, while one of equipment and services companies has fallen 31% since its high in early July. Some small companies have fallen more.

Still, while consumer spending by some measures accounts for roughly two-thirds of economic growth, energy represents something closer to 10% or less, analysts said.

Although tumbling oil stocks helped knock indexes down on Monday, the trouble in the oil patch has been largely a sideshow for the broad stock market. The Dow Jones Industrial Average and S&P 500 were both at records Friday, so even after the Monday decline, the Dow, at 17852.48, was less than 1% from a record. Even the beleaguered Russell 2000 small-stock index ended just 3.4% from its March record.

Amid the general optimism, investors have begun to ask when they should start buying beaten-down energy companies. Some analysts think oil itself could be poised for a bounce, although with the global economy still soft, few think it will be lasting.

Mr. Koesterich of BlackRock has begun talking about selectively buying the strongest of the large, integrated global oil companies, which have high dividend yields to reward investors even if the stock prices don't turn up immediately. But it is still too soon to think about the smaller, riskier equipment and services providers, he said.

Write to E.S. Browning at

Credit: By E.S. Browning

Subject: Petroleum industry; Stock exchanges; Prices; Alternative energy; Recessions; Junk bonds

Location: New York

Company / organization: Name: Waddell & Reed Financial Inc; NAICS: 523120, 523930; Name: Ameriprise Financial Inc; NAICS: 523930; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Costco Wholesale Corp; NAICS: 452910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634346244

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634346244?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

How the IMF's Christine Lagarde Sees the World's Economic Hot Spots; Falling Oil Prices Are a Net Positive, She Says, but Some Tough Choices Still Lie Ahead

Author: Baker, Gerard

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

Christine Lagarde, managing director of the International Monetary Fund, is optimistic about the global economy, thanks in part to plunging oil prices. [...]at the other end, you have cheaper energy, a euro that has clearly been depreciating, and, if you look at the banking sector, which has been sanitized, stress-tested by the European Central Bank and where remedies have been taken, you have three components that should be moving the euro area into positive territory.

Links: 360 Link to Full Text

Full text:

Christine Lagarde, managing director of the International Monetary Fund, is optimistic about the global economy, thanks in part to plunging oil prices. But she concedes that tough decisions still lie ahead for many, particularly in Europe. She spoke to Gerard Baker, editor in chief of The Wall Street Journal, about both encouraging signs and trouble spots. Edited excerpts follow.

Oil and Trouble

MR. BAKER: We've seen roughly a 40% decline in oil prices since the summer, and declines in other prices as well. What stresses and strains is this producing, and what are the benefits for the global economy?

MS. LAGARDE: What we do first is try to analyze whether it's a supply or demand effect. And in the present circumstances, it's predominantly supply. It's 80% supply, 20% demand. So that's pretty good news. If I was to address an audience in Saudi Arabia, Qatar or Kuwait, I would probably not look at it exactly the same way. But on a net basis, it is good news for the global economy.

MR. BAKER: How fragile is Russia? What threat does its fragility pose to the global economy?

MS. LAGARDE: I think it poses significant threats, but not just from an economic point of view. If you were to ask me what I'm concerned about at the moment, certainly the geopolitical threat created by the current [Russian] endeavors. The price of oil going down is adding to their fragility and their vulnerability, and they know it. It remains to be seen what the reaction will be. But it is certainly something that is an add-on to the ruble depreciation, to the sanctions actually affecting the Russian economy as well.

MR. BAKER: Will IMF intervention be needed, looking at some of these energy net-exporting countries?

MS. LAGARDE: I was in Kuwait about three weeks ago addressing the Gulf Country Councils, and I said to them, "If it continues the way it does, most of your economies will show fiscal deficit. You should be prepared for that and build the buffers that you will need."

If you look at who is going to be most affected, we just mentioned Russia; you have to think about Iran, clearly; closer to home, Venezuela; and a few African countries will be affected.

If the IMF was called upon to help not only Ukraine, as we do and have to at the moment, but many of those other countries, I would seriously need some help from [the U.S.].

MR. BAKER: It looks like Europe is in or very close to its third recession in five years. What's the outlook for Europe? What needs to be done?

MS. LAGARDE: This is what I've called the risk of the new mediocre: a combination of low growth and low inflation, which is bad news for countries where debt-to-GDP ratios are close to 100%.

MR. BAKER: Risk of deflation?

MS. LAGARDE: Some countries are already into deflation. But for the moment, it's more sustained low inflation, which is equally bad.

MR. BAKER: But it could get worse? And if it did?

MS. LAGARDE: It might very well get worse because of the price of oil. And high unemployment, which is the other very bad phenomenon of this new mediocre.

Now, you look at that, and that's bad news. But at the other end, you have cheaper energy, a euro that has clearly been depreciating, and, if you look at the banking sector, which has been sanitized, stress-tested by the European Central Bank and where remedies have been taken, you have three components that should be moving the euro area into positive territory. I'm not suggesting that this is a walk in the park. It is not.

MR. BAKER: There's a strong view from some in Europe that there should be aggressive monetary stimulus. But that is strongly resisted by the Germans, who want structural reform. Where do you stand?

MS. LAGARDE: Where they are at the moment, they need to use all available tools. That means growth- and job-friendly fiscal policies for those who can afford it; monetary policy that is innovative and quite aggressive; and it means, absolutely, structural reforms that they have been talking about and must get on with.

MR. BAKER: But they never do, do they?

MS. LAGARDE: Some of them do. A lot has been done in Spain. A lot has been done in Ireland. Now there are some big players...

MR. BAKER: France.

MS. LAGARDE: Yes. Significant structural reforms, particularly concerning the labor market and the job market, have to be implemented, not just talked about.

MR. BAKER: The pope went to the European Parliament last week and said, "Europe is haggard and elderly." And it feels like that.

MS. LAGARDE: He said, "It's a grandmother."

MR. BAKER: Yes. Like a rather poor and sick grandmother. It is like that, isn't it?

MS. LAGARDE: I will have a private meeting with him next week, so I'll ask him exactly what he meant.

MR. BAKER: The euro is making it worse, isn't it? The creation of the euro was a terrible mistake.

MS. LAGARDE: I think the mistake was to have assumed that by moving into a single currency everything else would follow, and the fiscal union would be a given, which has not happened. If you have a currency union without a fiscal union and banking union, it's like not having all cylinders to fire with. And that's, I hope, what they're going to be working on.

Situations in Asia

MR. BAKER: Will China pull off this balancing act of making pro-market reforms while maintaining enough growth to keep people fed and happy and in jobs and from rioting in the streets?

MS. LAGARDE: Many of us have for many years in a way suspected China of not being able to deliver, and many have shorted China. The truth is it actually delivers. We look very carefully at the monetary policy and the structural reforms, and this is just happening.

MR. BAKER: Is Japan going to get back on track?

MS. LAGARDE: You have to give them the credit of trying something that was really hard, and is still very hard. Where clearly it's a bit short on the delivery is both on the structural reforms and fiscal commitment. Our sense is that once the election is over, and hopefully [Abe's] hand will be stronger, he comes back to the fiscal plan.

For the moment, there is no slack in the Japanese economy. So when they do stimulus, when they put money into the construction business, for instance, there's nobody to build because the labor market is so tight. So they have to open up not only to women--and I hope they do because Japanese women are very talented--but also to immigration.

MR. BAKER: Is the U.S. economy strong enough to stand on its own feet without that amazing amount of support from the central bank?

MS. LAGARDE: If we include the effect of the oil-price reduction, our [growth] forecast for next year is 3.5%. That should be strong enough for the monetary policy to follow its course.

MR. BAKER: Are we not just dependent continually on these repeated injections of monetary stimulus?

MS. LAGARDE: It has been most helpful in the last two years, and without it, we would not be talking about growth in the U.S., or in England.

Now it's a question of gradually phasing out.

Credit: By Gerard Baker

Subject: Prices; Recessions; Deflation; Professional football; Global economy

Location: Russia Kuwait Europe

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634365331

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634365331?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Selloff of Energy Stocks Follows Oil-Price Drop

Author: Strumpf, Dan

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Dec 2014: C.4.

ProQuest document link

Abstract:

The J.P. Morgan Alerian MLP Index ETN, which tracks a basket of so-called master limited partnerships that mainly transport and store oil and gas, sank 5.2%.

Links: 360 Link to Full Text

Full text:

Stocks retreated, pressured by steepening declines in oil prices and fresh signs of economic weakness in Europe and Japan.

The Dow Jones Industrial Average posted its biggest one-day loss in six weeks, falling 106.31 points, or 0.6%, to 17852.48. The S&P 500 index dropped 15.06, or 0.7%, to 2060.31, while the Nasdaq Composite Index declined 40.06, or 0.8%, to 4740.69.

The selling was heaviest in energy stocks, as oil prices fell to new five-year lows. Benchmark U.S. oil futures fell 4.2% to $63.05 a barrel. The S&P 500 energy stocks index declined 3.9%.

"Oil broke down again today, and now most of the oil stocks are getting smashed," said Viren Chandrasoma, managing director of equity trading at Credit Suisse.

The pain has been especially pronounced for small-company energy stocks, many of which have taken on heavy debt loads to fuel their expansion. An exchange-traded fund that tracks small energy shares, the $24 million PowerShares S&P SmallCap Energy ETF, tumbled 7.6%.

Energy infrastructure stocks also slid. The J.P. Morgan Alerian MLP Index ETN, which tracks a basket of so-called master limited partnerships that mainly transport and store oil and gas, sank 5.2%.

Sellers of energy stocks included those who bought into earlier declines in anticipation of a floor and were now reversing course amid another tumble in oil prices, Mr. Chandrasoma said. "A lot of people were bottom-picking, thinking there's a good entry point in oil and oil-related names, and now they're throwing in the towel," he said.

Chevron was the second-biggest decliner in the Dow, shedding $4.07, or 3.7%, to $106.80. Exxon Mobil dropped 2.12, or 2.3%, to 91.70.

Other hard-hit energy shares included domestic producer Continental Resources, which fell 4.49, or 12%, to 33.74. Goodrich Petroleum slid 75 cents, or 20%, to 2.96.

Chris Bertelsen, chief investment officer at Global Financial Private Capital, which manages about $4.5 billion, said he sold some shares of energy companies around October, when the recent selloff was picking up steam. He said he continues to hold shares of some energy infrastructure companies. "The selloff in oil stocks is clearly a reaction to the fact that there's going to be no letup . . . as far as supply is concerned," he said.

Stocks began the session lower on the heels of declines in Europe, after data showed German industrial output rose less than expected in October and Japan's economy contracted 1.9% in the third quarter. The Stoxx Europe 600 Index closed 0.7% lower.

Gold futures rose 0.4% to $1,194.70 an ounce. The yield on the 10-year Treasury note fell to 2.257%, from 2.306% on Friday.

Overseas early Tuesday, Japan's Nikkei stock average was down 0.3%, Hong Kong's Hang Seng Index was down 0.9%, the Shanghai Composite Index was up 0.1%, Australia's S&P/ASX 200 was down 1.5% and South Korea's Kospi was down 0.3%.

Credit: By Dan Strumpf

Subject: Dow Jones averages; Stock prices; Daily markets (wsj)

Classification: 9190: United States; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.4

Publication year: 2014

Publication date: Dec 9, 2014

column: Monday's Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634392995

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634392995?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Asia, Iraq Are Latest Factors in Oil's Fall

Author: Friedman, Nicole; Copeland, Rob

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Dec 2014: C.1.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Oil prices skidded to fresh five-year lows Monday, as lackluster readings on Asian economies and a price cut by Iraq heightened concerns about a global supply glut.

U.S. oil prices ended $2.79, or 4.2%, lower at $63.05 a barrel on the New York Mercantile Exchange, the lowest level since July 16, 2009. Nymex oil futures are down 36% this year.

Brent crude, the global benchmark, fell $2.88, or 4.2%, to $66.19 a barrel, the lowest level since Sept. 29, 2009. Brent is down 40% in 2014.

The decline extends a six-month selloff in crude driven by rising production in the U.S. and elsewhere. The tumble in oil began overnight but accelerated during the New York trading day.

The sharp move in crude oil weighed on shares of energy companies, helping send major U.S. stock indexes lower. The Dow Jones Industrial Average lost 106.31 points to 17852.48.

"It's getting close to the marginal cost for shale production in North America," said Michael Hiley, an energy trader at brokerage LPS Partners Inc. "I think guys are very nervous."

Iraq on Monday cut the January price of its flagship crude-oil blend for Asian and American buyers, but it raised it for European customers, in line with similar moves earlier this month by Saudi Arabia, the world's largest oil exporter. Market watchers say these price cuts indicate producers' desire to protect their market share during the downdraft, a stance that is likely to result in a steady flow of barrels.

The fund is now down more than 20% for the year. The firm didn't respond to requests for comment.

The Greenwich, Conn., firm's recent success helps erase paper losses from the first half of the year.

---

Anthony Harrup, Sarah Kent and Summer Said contributed to this article

Credit: By Nicole Friedman and Rob Copeland

Subject: Commodity prices; Crude oil

Classification: 9180: International; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.1

Publication year: 2014

Publication date: Dec 9, 2014

column: Commodities Report

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634393522

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634393522?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

European Stocks Plunge; Growth Fears in Asia, Uncertainty in Greece and Five-Year Oil Price Low Weigh on Shares

Author: Cox, Josie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

European stock markets plunged deep into the red Tuesday, roiled by economic growth fears in Asia, political uncertainty in Greece and the tumbling price of oil still battering shares in energy companies.

The Stoxx Europe 600 index ended the session 2.3% lower, having already closed the previous session down 0.7%, mirroring similar falls on country indexes in Germany, France and the U.K. , however, eclipsed all others, amid a flare-up in political uncertainty.

Stocks in Athens dropped almost 13%, led by banks, while yields on the country's 10-year government bonds rose 0.74 percentage point to 7.89%, reflecting a fall in the price of the debt.

On Monday, a government spokeswoman said that the parliament on Dec. 17--two months ahead of schedule--to replace Karolos Papoulias, whose five-year term was slated to end in March.

If the voting rounds fail to select a new president, parliament will be dissolved and national elections called, possibly on Feb. 1.

The latest opinion polls suggest Greece's radical left opposition Syriza party would win national elections by a three to six percentage-point margin. Syriza threatens to tear up the reform and austerity program that has accompanied the bailout, likely precipitating a new crisis with Greece's creditors.

The announcement came just hours after eurozone finance ministers decided to talks into early next year.

Deutsche Bank analyst George Saravelos said that both events set markets up for "a very elevated period of event risk into year-end."

But Greece wasn't the only reason for Tuesday's sharp selloff.

In China, after Beijing took fresh steps to rein in growing risks in the country's debt-laden financial system.

Compounding concerns, policy makers gathering in Beijing this week for a key summit are widely expected to lower China's economic growth target for next year after years of piling up debt to fuel fast expansion.

Japan's Nikkei index snapped a seven-day winning streak on Tuesday, after figures on Monday 1.9% in the third quarter.

In the U.S., the S&P 500 on Monday recorded its biggest one-day percentage drop since last October. On Tuesday the index was down 0.8% in late European trade.

In commodity markets on Tuesday, the price of oil hit a fresh five-year low and even though to trade higher on the day above $66.70 a barrel, energy stocks and the currencies of commodity-dependent economies remained under pressure.

The Stoxx Europe 600 subindex of oil and gas companies was down by around 1.8% at the close, taking its year-to-date decline to over 12%.

ING credit strategist Nadège Tillier said that for the majority of OPEC members, a price of $65 a barrel already means they are selling oil below the cost of production. "In the long run, a price below $85 per barrel means financing difficulties for most oil and gas companies," she said.

On Monday, U.S. oil giant ConocoPhillips had already said it by 20% next year to $13.5 billion, a sign that it is treating the plunge as more than a temporary dip.

Jefferies economists meanwhile, published a note on Tuesday in which they lowered their average price forecast for Brent in 2015, 2016 and 2017 by 16% to $72, $83 and $90, respectively. They had already cut forecasts in October but said the latest fall is "more material" than expected.

Brent crude has now fallen more than 40% since the start of the year, to a level last seen in August 2009.

BNP Paribas economists said that Norway's central bank would "certainly" cut economic growth forecasts at its policy meeting on Thursday to reflect the slump in oil.

In its last inflation report in September, Norges Bank said it expected growth of 2.25% in 2015 and 3.0% in 2016 but oil price futures at the time crude oil close to $100 per barrel over the bank's forecast period to 2017.

In currency markets, Russia's ruble stumbled. The currency has against the U.S. dollar so far this year and was down an additional 0.9% on Tuesday.

Nigeria's naira was around 2.1% lower against the buck, according to Thomson Reuters data, after the country's central bank on Monday sold an additional $200 million of reserves, in an effort to strengthen its ailing currency, according to a memo written by the central bank.

One dollar currently buys more than 184 naira, almost 13% more than at the start of the year.

Gold, which investors tend to buy during times of volatility was 2.8% higher Tuesday at $1,228.70 per troy ounce.

Write to Josie Cox at

Credit: By Josie Cox

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634409003

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634409003?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

German Exports Fall but Still Robust; Unadjusted Figures Show Exports Hit a New Record, Buoyed by Weaker Oil Price and Euro

Author: Buell, Todd

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

FRANKFURT--German exports declined at the start of the fourth quarter in adjusted terms, but the sector remains robust, helped by a weaker euro and lower oil price.

Links: 360 Link to Full Text

Full text:

FRANKFURT--German exports declined at the start of the fourth quarter in adjusted terms, but the sector remains robust, helped by a weaker euro and lower oil price.

In seasonally adjusted terms, exports decreased by 0.5% on the month in October, data from the country's statistics office showed Tuesday. Imports, however, fell at a sharper pace, dropping 3.1%. This brought the seasonally adjusted trade surplus to [euro]20.6 billion ($25.3 billion), above economists' expectations of [euro]19.0 billion in a Dow Jones Newswires poll.

Despite the monthly decline, analysts viewed the figures as a sign of a in Germany, given that in September exports rose 5.5% on the month.

In unadjusted terms, German exports in October reached a new record of [euro]103.9 billion, surpassing the previous month's all-time high of [euro]102.5 billion.

The data showed that in annual terms, exports to other eurozone countries increased by 1.9%, while exports to countries not in the eurozone, but in the European Union rose by 7.6%. Exports to countries outside the EU grew by 6.3%.

Data from January to October showed that Germany's most significant export strength comes from Europe. On an annual basis, exports to the eurozone were up 2.5%, while EU exports outside the eurozone were up 9.8%. Non-EU exports were up only 1.7%.

"Europe is by now the stability anchor of German exports again," said Berenberg economist Christian Schulz.

Mr. Schulz also said that lower oil prices played a significant role in cutting Germany's import bill in October. Last week, Germany's Bundesbank, they could add an extra 0.1 to 0.2 percentage point to German economic growth in the next two years.

The country's export strength may to some extent be attributable to the weaker euro. Thefrom September through October. A weaker currency generally helps exporters by making their products cheaper when priced in foreign currency.

"German exporters are normally among the main European beneficiaries from a weaker currency," said ING economist Carsten Brzeski in a research note. He said that German exports have tended to be "relatively immune" to a strengthening currency, yet benefit from the currency weakening.

"A Chinese buyer of a Mercedes will always buy a Mercedes, even if it gets more expensive. On the other side, if the Mercedes gets cheaper, more Chinese can afford it," he added.

Josie Cox in London contributed to this article.

-Write to Todd Buell at todd.buell@wsj.com

Credit: By Todd Buell

Subject: Euro; Exports; Eurozone

Location: Germany Europe

Company / organization: Name: Dow Jones Newswires; NAICS: 519110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Economy

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634409043

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634409043?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

World Bank Cuts Russia's Growth Forecasts Due to Declining Oil Prices; Russian Economy Seen Contracting 0.7% in 2015

Author: Kolyandr, Alexander

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

"Investment is projected to contract for a third year in a row in 2015, because of continued uncertainty, restricted access to international financial markets by Russian companies and banks, and lower consumer demand," said Birgit Hansl, World Bank's lead economist for Russia.

Links: 360 Link to Full Text

Full text:

MOSCOW--The World Bank on Tuesday cut Russia's economic outlook for the next two years to reflect, Moscow's main export.

It is the second time the bank has cut Russia's economic outlook for 2015 in a week, and is its third cut since end September.

Under its new baseline scenario, the World Bank forecasts the Russian economy will contract by 0.7% in 2015. The international financial institution said on Dec. 2 it expects Russia's gross domestic product to remain flat in 2015, which was lower than itsof 0.3% growth published Sept. 24.

The bank also reduced its growth forecast for 2016 by a notch to 0.3% from 0.4% it expected in September.

The bank's new baseline, or most likely scenario, assumes an average oil price of $78 per barrel for 2015 and of $80 per barrel for 2016.

The foresees a slightly deeper contraction based on slightly higher prices next year. It said Dec. 2 it expects GDP to fall 0.8% next year amid average oil prices of $80 per barrel.

Lower oil and commodity prices are expected to negatively affect investment decisions for the companies in the resource sector, she said.

The bank foresees consumption, the main driver of Russia's economy in the past several years, to decline for the first time since 2009, following negligible expansion in 2014.

Things are expected to improve only marginally in 2016, as investment activity is projected to remain below its 2014 level, " constrained by lingering structural problems and persistent negative business sentiments resulting from geopolitical tension and economic policy uncertainty," the bank said.

Under the bank's pessimistic scenario, oil prices will average $70 per barrel in 2015 and $72 per barrel in 2016 resulting in a 1.5% contraction next year and 0.3% growth in 2016.

The optimistic scenario envisages a $85 average oil price per barrel in 2015 and $90 per barrel in the following year, resulting in flat economic growth in 2015 and a 0.5% expansion in 2016.

Write to Alexander Kolyandr at

Credit: By Alexander Kolyandr

Subject: Energy economics; Crude oil prices; Economic growth; Gross Domestic Product--GDP

Location: Russia

Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Economy

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634425863

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634425863?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Futures Arrest Slide, Notching Gain for Day; Prices Remain Down About 40% From Highs Earlier This Year

Author: Berthelsen, Christian

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

In its own survey of domestic oil inventories released late Tuesday, the industry trade group American Petroleum Institute said stockpiles rose 4.4 million barrels in the week ended Dec. 5, gasoline stocks rose 6.7 million barrels, distillate stocks rose 4.3 million barrels and refinery operations increased 1.6 percentage points to 94.6% of capacity, according to a research note from Citigroup.

Links: 360 Link to Full Text

Full text:

Oil prices arrested their free fall Tuesday, notching a small gain in a move analysts attributed to profit-taking by traders with bearish bets against the market.

Brent crude for January delivery, the global benchmark, snapped a five-session losing streak to end up 65 cents, or 1%, at $66.84 a barrel on the ICE Futures Europe exchange. The front-month U.S. contract ended higher for the first time in four days, rising 77 cents, or 1.2%, to $63.82 a barrel on the New York Mercantile Exchange.

Both futures contracts remain down about 40% from their highs earlier this year as surging production around the world has created a glut of oil.

Analysts said there was little news in the market that would drive a rebound and attributed Tuesday's gains to technical support and traders closing bets that prices would fall, buying back futures to profit from their bearish wagers.

"There's a little short-covering going on," said Phil Flynn, account executive at wholesale brokerage Price Futures Group in Chicago. "I do think there is a little bit of hesitation to drive it lower" at these levels, he said.

There were some modestly bullish developments. In its short-term energy outlook, the U.S. Energy Information Administration reduced its projection for domestic oil production next year by 100,000 barrels a day, to 9.32 million from 9.42 million. Still, that represents growth of 2.6% from current levels.

In addition, analysts surveyed by The Wall Street Journal said they expected domestic crude inventories fell by 2.7 million barrels last week. The EIA is set to release its weekly storage data Wednesday morning.

Meanwhile, the U.S. dollar posted a rare decline on Tuesday, providing a brief respite from a monthslong strengthening trend that has weighed on commodity markets, particularly oil. Oil tends to rise when the dollar falls because it becomes less expensive for buyers using foreign currencies.

Many analysts expect bearish conditions to resume and prevail in the coming months, barring unexpected geopolitical disruptions or a surprise move by the Organization of the Petroleum Exporting Countries to rein in production.

Oil futures have tumbled since June as supplies--growing from production in the U.S., Iraq, Libya and elsewhere--have flooded the market and demand has remained tepid. OPEC member nations, led by Saudi Arabia, have decided to keep production steady rather than pulling back to support prices, in a bid to defend their market share. The U.S. is now producing more than nine million barrels of oil a day, and exporting nearly 3.8 million barrels a day of mainly refined products.

On Monday, selling was driven in part by Iraq's decision to lower prices for its oil sold to Asia and the U.S., following a similar move by Saudi Arabia last week.

In refined product markets, gasoline for January delivery rose 1.7 cents, or 1%, to settle at $1.7236 a gallon on the Nymex. January diesel rose 2.91 cents, or 1.4%, to $2.0840 a gallon.

Write to Christian Berthelsen at

Credit: By Christian Berthelsen

Subject: Petroleum industry; Oil reserves; Profits; Inventory; Petroleum production

Location: United States--US

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634443221

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634443221?accountid=7117

Last updated: 2017-11-21

Database: The Wall Stre et Journal

IMF Sees Favorable Outlook for Kuwait's Economy; Non-Oil Growth to Reach 4-5% in the Medium Term

Author: Fitch, Asa

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

DUBAI--The outlook for Kuwait's economy is favorable, despite a recent slide in oil prices that has eaten away at government-budget surpluses across the energy-rich Persian Gulf, the International Monetary Fund said in an annual review of the country's economy Tuesday.

Links: 360 Link to Full Text

Full text:

The Kuwaiti economy is expected to grow by only 1.3% this year due to flat oil production, the IMF said in a statement, but the outlook is brighter because of better non-oil growth and moderate levels of inflation. The IMF expects non-oil GDP growth rates to reach 4% to 5% in the medium-term, driven by consumption and government-led infrastructure development.

Declines in global oil prices from above $108 a barrel in June to around $65/bbl this week have shaken up the fiscal picture for countries across the Gulf, from Kuwait to Saudi Arabia and the United Arab Emirates, all of which rely heavily on energy revenues to fund budgets. Saudi Arabia, the world's second-largest oil producer behind the U.S., has decided not to play its usual role as a swing producer to support prices, further dampening the government-revenue outlook for oil exporters.

But Kuwait's fiscal position is strong relative to its peers, the IMF said. The country needs oil to trade at an average of about $54 a barrel to balance its budget without cutting spending, according to IMF estimates earlier this year, the lowest such figure in the Gulf.

Despite the positive economic outlook and stable fiscal balance, however, the IMF has urged for reforms to rein in government spending and withdraw subsidies while diversifying the economy away from oil. As in many Gulf countries, Kuwait's government subsidizes fuel and acts as the go-to employer for citizens, limiting the growth of the private-sector non-oil economy.

"The fiscal position is currently strong but restraint in current spending is needed to preserve buffers and increase saving for future generations," the IMF said, adding that subsidy reform should be undertaken in such a way that protects poorer segments of the population.

A new government capital expenditure plan for 2015 through 2019 should set "realistic targets," the IMF said, while hinting that the government needed to review some of the larger development projects it is planning. "A cost-benefit analysis of megaprojects is warranted," the IMF said.

Write to Asa Fitch at

Credit: By Asa Fitch

Subject: Petroleum industry; Economic development; Petroleum production

Location: Kuwait United Arab Emirates Saudi Arabia

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Economy

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: New spapers

Language of publication: English

Document type: News

ProQuest document ID: 1634475078

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634475078?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Will Wildcatter's 'Naked' Gamble on Oil Prices Pay Off? Continental Resources CEO Hamm Sells Hedges, Betting on Quick Rebound in Crude

Author: Ailworth, Erin; Zuckerman, Gregory; Gilbert, Daniel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

Harold Hamm's willingness to make risky bets helped him build Continental Resources Inc. into the one of the biggest oil producers in North Dakota's Bakken Shale and a symbol of the U.S. energy boom.

Links: 360 Link to Full Text

Full text:

Harold Hamm's willingness to make risky bets helped him build Continental Resources Inc. into the one of the biggest oil producers in North Dakota's Bakken Shale and a symbol of the U.S. energy boom. But his latest gamble--a quick rebound in crude prices--is rubbing some investors and analysts the wrong way.

Mr. Hamm, who founded Continental and owns 68% of its shares, announced in early November that the company had cashed in almost all of its financial hedges that guaranteed it could sell millions of barrels of oil for about $100 apiece. The company said it had realized $433 million in cash from selling the hedges, some of which ran through 2016.

"We feel like we're at the bottom rung here on prices and we'll see them recover pretty drastically, pretty quick," Mr. Hamm said on a Nov. 5 call with analysts. He said the Organization of the Petroleum Exporting Countries was pushing down to slow America's expanding energy output.

Now, removing the hedges, known in the industry as "going naked," looks misguided even to some of the company's fans, after the recent tumble for oil prices. The benchmark price for U.S. , falling from $81 in late October to $63.82 on Tuesday.

If Continental had kept the contracts that insured it against lower crude prices, it could have reaped $52 million more for its oil in November, according to a Wall Street Journal review of company disclosures. And it might have received $75 million more this month, assuming current conditions continue.

The Journal's calculation of about $127 million in forgone revenue is similar to projections by several Wall Street analysts, and those projections would continue to rise in the coming months if oil prices remain below $96 a barrel.

The company said it disagreed with the Journal's figures but wouldn't provide its own, except to say that after figuring in revenue it received for selling its hedges, it expects the "net negative effect" to be $25 million to $30 million in November and December. It sold nearly $1.2 billion of oil and gas in the third quarter and reported net income of $533 million.

"It was a bad move with terrible timing," said Gregg Jacobson, a portfolio manager at Caymus Capital Partners LP, a $200 million Houston hedge fund manager that had about 4.5% of its portfolio in Continental shares as of the end of the third quarter. Though he thinks the hedging sale will prompt some investors to view the company as unusually risky, Mr. Jacobson said he remains a supporter because of its executives' skill in finding and drilling for oil.

"In the long run, the stock will respond to how they perform in the field," he said.

While shares of many U.S. energy producers have had double-digit percentage declines since oil prices began falling in late June, Continental's stock has been hammered. Its shares, which closed up 7.2% at $36.18 on Tuesday, have fallen by more than half since the end of August, and more than 25% since Mr. Hamm disclosed on Nov. 5 that the company had sold the hedges.

Mr. Hamm said in an interview that he still believes his bet could pay off but that it might take as many as two years to tell. "You can't condemn that as a bad decision," he said. "You haven't seen it play out."

Companies like Continental can react quickly to market changes, he said, which gives them an advantage over OPEC's members. The cartel is discounting "the resiliency of U.S. producers," he said, adding that investors "need to look at Continental long-term."

A wildcatter--he has called himself an "explorationist"-- the company that would become Continental in 1967 and first struck oil in 1971 in Oklahoma. More than two decades ago, he began focusing on exploring the then-little-known Williston Basin, which stretches from South Dakota to the Canadian province of Saskatchewan. Over time, his company became a leader in the Bakken formation in North Dakota, which has become one of the biggest oil fields in the U.S.

Continental produced nearly 35 million barrels of oil last year, almost four times what it was producing five years earlier. That growth has helped push U.S. oil output to more than 9 million barrels of crude a day, up from 5 million in 2008.

Though Continental has become a leader of the U.S. energy boom, it is unusual. Institutional and activist investors have curbed some of the risk-taking of wildcatters at other energy outfits, and few companies of Continental's size remain controlled by their founders.

Continental said it had 5.2 million barrels insured in November and December at an average price of about $100.

When oil prices are falling, hedges--contracts that many energy companies buy to protect against declining prices by guaranteeing a minimum price for the oil and gas they produce--become much more valuable. Continental notes that several of its competitors aren't hedged, including Apache Corp., which has no hedges on the books in 2015. Apache said it does have some production insured through the end of this year.

Mr. Hamm isn't the first energy executive to abandon hedges. Under the leadership of former CEO Aubrey McClendon, Chesapeake Energy Corp. dropped its natural-gas hedges in 2011, leaving it exposed to a dismal gas market and dealing with a cash crunch the following year.

Continental isn't likely to face a liquidity crisis--its debt is smaller than many of its competitors at about 1.7 times its cash flow, according to S&P Capital IQ. And the company has $1.75 billion in unused credit, recent financial filings show.

"They've built such a good balance sheet, they have the luxury of making this gamble," said Jason Wangler, an analyst for Wunderlich Securities, who called the move a speculative bet. "They left money on the table in the short term."

Mr. Hamm, he said, is "the guy you're investing in, as much as the company."

Since selling Continental's hedges, Mr. Hamm has lost about $4.4 billion of his personal fortune as Continental's shares have fallen--a loss that could be compounded by Mr. Hamm's divorce. A judge recently awarded the former Mrs. Hamm, Sue Ann Arnall, a ; she appealed that decision on Friday. Mr. Hamm now owns about $9.2 billion of company stock.

Some investors say Continental's primary acreage in the Bakken and elsewhere renders the hedging decision less important in the long-term.

"Cash flow next year will be lower and more volatile, assuming prices stay under pressure," said Joe Chin, an analyst at Obermeyer Wood Investment Counsel LLLP, an Aspen, Colo., firm that owned 340,000 Continental shares at the end of the third quarter. "But we remain confident about management's ability to deploy capital."

Write to Erin Ailworth at , Gregory Zuckerman at and Daniel Gilbert at

Credit: By Erin Ailworth, Gregory Zuckerman and Daniel Gilbert

Subject: Petroleum industry; Financial performance; Investments; Crude oil prices

Location: United States--US North Dakota

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634502649

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634502649?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Nigeria's Growth to Slow in 2015, Says Finance Minister; Africa's Largest Economy to Slow By About a Percentage Point as Oil Prices Drop

Author: Hinshaw, Drew

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

Abuja, NIGERIA--Growth in Africa's largest economy and oil exporter could slow by about a percentage point next year, Nigeria's finance minister said, as the country adjusts to falling crude prices.

Links: 360 Link to Full Text

Full text:

Abuja, NIGERIA--Growth in Africa's largest economy and oil exporter could slow by about a percentage point next year, Nigeria's finance minister said, as the country adjusts to falling crude prices.

Africa's most populous nation, is cutting spending on government travel and equipment, and raising taxes on yachts and private planes as . The tightening will shrink growth to around 5.3 %, delaying some infrastructure, and will force Nigeria to tax a booming informal economy that has long escaped oversight, said Ngozi Okonjo-Iweala, the country's finance minister.

"Undoubtedly, its going to be tough times," she said, adding: "we're beginning to feel the impact."

Tumbling oil prices have put on the back foot. But few of those countries are watching oil revenue dwindle at such an inopportune moment as Nigeria.

The country's spending needs are soaring as oil prices move in the opposite direction. A costly and tense election next February is likely to pit a majority-Muslim north against the predominantly Christian southern regions. During the last election in 2011, at least 800 people were left dead in .

On a brighter note, Nigeria's middle class is steadily growing and its major cities are expanding fast. However, such growth burdens potholed roads, congested ports and rusted power lines in need of repair.

Then there is Boko Haram, an Islamist militancy boasting tanks and rocket launchers who control a Belgium-sized swath of northeastern Nigeria. A recently-purchased set of helicopter gunships and surveillance planes are helping Nigeria recapture some of that area, with Ms. Okonjo-Iweala saying that "they are being pushed out day by day."

Nigeria's problems are starting to add up, Ms. Okonjo-Iweala said. If not for Boko Haram and dropping oil prices, Nigeria would be registering 6.8 % growth, she added.

That is about what the country averaged each year for the past decade. And yet, even during boom years, Nigeria struggled to tax the new businesses flourishing in its informal market. Oil still accounts for 70 % of government revenue, but relatively little of it has been put aside. An oil savings fund that sat at more than $20 billion in 2008, just before oil first crossed $100 per barrel, has now fallen to only $4 billion.

"On the savings side, yes, we could have done better," said Ms. Okonjo-Iweala. "Thank god we had the four billion."

To prioritize, the finance minister is looking to focus spending on security and infrastructure projects. Ms. Okonjo-Iweala said she's hoping to limit cuts to health and education spending. In coming years, it will likely raise its valued-added-tax, she said.

A fifth of the country's budget is spent on the military, and that is unlikely to change, Ms. Okonjo-Iweala said.

"Do we have a choice? Should we say 'no, let us allow the insurgents to take over?'"

Write to Drew Hinshaw at

Credit: By Drew Hinshaw

Subject: Energy economics; Informal economy; Crude oil prices; Athletes

Location: Africa

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634502661

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634502661?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Exxon Backs View on Global Energy Demand; Energy Giant, in Annual Industry Outlook, Projects Demand to Grow 35% by 2040

Author: Chen, Angela

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

Exxon Mobil Corp. left its outlook for global energy demand mostly unchanged on Tuesday, even as plunging oil prices have prompted energy companies to reduce their budgets and added pressure on countries that rely on oil revenue.

Links: 360 Link to Full Text

Full text:

In its yearly outlook report on the industry, the oil giant affirmed its view that global energy demand will grow 35% by 2040, due to significant global growth in the middle class, an additional 2 billion people in the world and increased strength in emerging economies.

It added, however, oil and natural gas will meet about 65% of global demand growth in 2040, up from last year's prediction of 60%. Exxon again said natural gas will continue to be the fastest-growing major fuel source, although rise of nuclear energy is expected to jump.

Globally, Asia is expected to overtake Europe as the world's largest gas importer, as production in the region doubles and demand nearly triples. North America, meanwhile, is likely to become a net exporter of liquids by 2020, Exxon said, due to increasing supplies of natural gas liquids and bitumen from oil sands.

Exxon's outlook comes as tumbling oil prices hit a fresh five-year low on Monday as global supplies, growing from production in the U.S., Iraq, Libya and elsewhere, have flooded the market and demand has remained tepid.

In this year's report, Exxon emphasized the rising importance of renewable energy sources, like wind, solar and biofuels, which it said it expects to be among the fastest-growing major energy sources through 2040.

Specifically, Exxon said renewable energies such as wind, solar and biofuels are projected to grow 6% a year on average through 2040, at which point they will approach about 4% of global energy demand. Nuclear energy will nearly double.

The company also downplayed the significance of coal, which will be surpassed by natural gas. Coal demand is expected to rise through 2025 and then decline in line with the slowing of China's economic growth.

Oil futures have been collapsing since June. Member nations of the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, have decided to keep production steady rather than pulling back to support prices, in a bid to defend their market share.

That has prompted some companies to make changes already. ConocoPhillips said Monday from this year to $13.5 billion in 2015. The Houston-based oil firm said it plans to spend less on major projects that are nearly complete as well as defer spending on shale-oil prospects in North America. Meanwhile, Norway's Statoil ASA said Friday that it would suspend the operations of three oil-drilling rigs for longer than previously planned because of overcapacity.

Write to Angela Chen at

Credit: By Angela Chen

Subject: Natural gas; Petroleum industry; Alternative energy sources; Energy policy

Location: Asia North America

Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634510685

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634510685?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Canada's Harper: Won't Impose New Carbon-Emission Rules on Oil, Gas Sector; Country's Important Energy Industry Has Been Hit Hard by Drop in World Oil Prices

Author: Vieira, Paul

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.

ProQuest document link

Abstract:

Mr. Harper said in Parliament Tuesday that his Conservative government would prefer to introduce new environmental rules for the oil patch in conjunction with the U.S. Canada's oil-and-gas sector is the largest source of the country's carbon emissions, at 25%, according to government data.

Links: 360 Link to Full Text

Full text:

OTTAWA--Canada won't impose new carbon-emission rules on its oil and gas sector given the current turbulence in the industry, Prime Minister Stephen Harper said Tuesday.

"Frankly, under the current circumstances in the oil and gas sector, it would be crazy economic policy to do unilateral penalties on that sector. We are clearly not going to do that," Mr. Harper said Tuesday in Canada's legislature, in response to a lawmaker's query about the lack of environmental rules for the energy sector.

"We are not going to kill jobs," Mr. Harper said.

Canada's important energy sector has been hard hit by the recent collapse of world oil prices, and a number of Canadian producers have announced plans to scale back spending and cut dividends as crude oil nears a five-year low.

Mr. Harper's government, which counts the resource-rich western provinces as its core political base, had indicated it planned to introduce energy-sector carbon rules, but those measures have yet to emerge. Early this year, it said it was prepared to work with the U.S. on environmental rules covering the continental oil-and-gas sector.

Mr. Harper said in Parliament Tuesday that his Conservative government would prefer to introduce new environmental rules for the oil patch in conjunction with the U.S.

Canada's oil-and-gas sector is the largest source of the country's carbon emissions, at 25%, according to government data.

The sharp decline in the price of oil, to a five-year low overnight Tuesday before rebounding, has producers across the globe rethinking energy projects. Canada has seen a spate of producers, from Canadian Oil Sands Ltd. to Baytex Energy Corp. to Trilogy Energy Corp., unveil plans to cut capital spending and their dividends. On Monday, the main Toronto stock index had its worst day in 18 months, weighed down by energy stocks.

Bank of Canada Governor Stephen Poloz said last week lower oil prices will lead to slower economic growth, and it is "clearly negative" for Canada. Crude oil accounts for Canada's largest export, at 18% of total.

Alberta Premier Jim Prentice told reporters in Edmonton that his province is reassessing its carbon-emissions policy, with a decision expected by the end of the year. However, he added that "under no circumstances are we going to make changes at this difficult time" that would hinder investment in the oil-rich province.

Write to Paul Vieira at

Credit: By Paul Vieira

Subject: Energy industry; Petroleum industry; Energy policy; Carbon; Capital expenditures

Location: Canada

People: Prentice, Jim Poloz, Stephen

Company / organization: Name: Baytex Energy Corp; NAICS: 324110; Name: Canadian Oil Sands Ltd; NAICS: 211111; Name: Bank of Canada; NAICS: 521110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 9, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634597410

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634597410?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

North Dakota Energy Regulator Mandates Steps to Reduce Oil Volatility; State Energy Regulator Issues Steps to Make Oil Safer for Rail Transport

Author: Dawson, Chester

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

North Dakota issued new rules Tuesday that require energy companies to treat crude-oil pumped from the Bakken Shale to make it less volatile and safer to transport by railroads.

In an unprecedented step that comes amid growing concern about the hazards of oil trains moving across the U.S. and Canada, the North Dakota Industrial Commission said it will mandate that well operators strip explosive gases from crude-oil that shows a high vapor-pressure reading.

The state regulation will go into effect on April 1, 2015. It requires that companies operating in North Dakota process their crude-oil through equipment at or near well sites that heats up the liquid to burn off volatile gases.

The rule is the first major move by regulators to address the role of gaseous, volatile crude-oil in railroad accidents. Several oil trains laden with crude pumped from the Bakken have derailed and exploded, including the deadly July 2013 accident in Lac-Mégantic, Quebec, that killed 47 people.

Roughly two-thirds of all oil pumped in North Dakota leaves the state on trains because not enough pipelines exist to move it.

Oil-train traffic has expanded exponentially in the five years as crude production in the Bakken Shale soared. In 2009, U.S. railroads transported about 21,000 barrels a day of oil; today they carry 1.1 million barrels a day, according to data from the Surface Transportation Board, a federal regulator. Trains with 100 railcars linked together that stretch for a mile or more regularly move crude from North Dakota near the Canadian border to U.S. refiners at the East, West and Gulf Coasts.

"It will create a consistent, stable fluid," Lynn Helms, director of the state's Department of Mineral Resources, said of the new regulations.

Under the new mandate, North Dakota oil can't be transported unless it has a vapor pressure reading of 13.7 pounds a square inch or lower. To keep the pressure at or below that level most oil will need to be heated to a minimum of 110 degrees, Mr. Helms said. Special equipment called heater-treaters are used to burn off explosive gases from the oil.

The new pressure standards represent the first time any state or federal regulator has said oil must be conditioned to make it safer to transport, but they still allow for a relatively high vapor pressure reading relative to other common types of crude.

By comparison, Louisiana Light Sweet pumped in the Gulf of Mexico, has a vapor pressure of 3.33 PSI, according to data from the Capline pipeline. Basra Light, a type of crude pumped in Iraq and imported into the U.S., has a reading of 4.8.

Bakken oil producers spent months fighting new regulations and initial industry reaction to the new rule was muted. "We're going to take some time to very carefully review the order with our members to determine what the implications will be," said Tessa Sandstrom, a spokesperson for the North Dakota Petroleum Council, an industry trade group.

"The new regulations should help, but they're only as good as the enforcement," said Don Morrison, executive director of the Dakota Resource Council, an environmental group. "Our state regulators have shown a reluctance to enforce rules in the past so it's up to them to implement this effectively."

It is unclear how costly or disruptive the rules will be to well operators, but state officials said a recent survey found that a majority of existing field equipment would pass or come close to meeting the new standards.

In the last three weeks about 300 existing heater-treaters were inspected and roughly half of them are already in compliance, Mr. Helms said. An additional one-third of the equipment was operating below 110 degrees but could be brought into compliance. And about 13% of the equipment inspected wasn't using any heat to treat the oil.

Mr. Helms said the new rules on crude-oil treatment may make it more difficult for some Bakken crude producers to meet target to reduce the amount of surplus natural gas burned off, or flared, from well sites.

Russell Gold contributed to this article.

Write to Chester Dawson at

Credit: By Chester Dawson

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 10, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634606132

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634606132?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Crude Oil Gets Back In Win Column

Author: Berthelsen, Christian

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Dec 2014: C.4.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Oil prices arrested their free fall, notching a small gain in a move analysts attributed to profit-taking by traders with bearish bets against the market.

Both contracts remain down about 41% from 2014 highs hit in June, as surging production around the world has created a glut of oil.

Analysts said there was little news that would drive a rebound and attributed Tuesday's gains in part to traders closing bets that prices would fall, by buying back the contracts that profit from a drop in prices.

"There's a little short covering going on," said Phil Flynn, account executive at wholesale brokerage Price Futures Group in Chicago. "I do think there is a little bit of hesitation to drive it lower" at these levels, he said.

Many analysts expect bearish conditions to resume and prevail in coming months, barring unexpected geopolitical disruptions or a surprise move by the Organization of the Petroleum Exporting Countries to rein in production.

Oil prices have tumbled since June as supplies -- increasing from production in the U.S., Iraq, Libya and elsewhere -- have flooded the market and demand has remained tepid.

Credit: By Christian Berthelsen

Subject: Commodity prices; Crude oil

Location: United States--US

Classification: 9190: United States; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.4

Publication year: 2014

Publication date: Dec 10, 2014

column: Commodities Report

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634670879

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634670879?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Will CEO's 'Naked' Oil Gamble Pay Off?

Author: Ailworth, Erin; Zuckerman, Gregory; Gilbert, Daniel

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Dec 2014: B.1.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Harold Hamm's willingness to make risky bets helped him build Continental Resources Inc. into the one of the biggest oil producers in North Dakota's Bakken Shale and a symbol of the U.S. energy boom. But his latest gamble -- a quick rebound in crude prices -- is rubbing some investors and analysts the wrong way.

Now, removing the hedges, known in the industry as "going naked," looks misguided even to some of the company's fans, after the recent tumble for oil prices. The benchmark price for U.S. oil has continued to slide, falling from $81 in late October to $63.82 on Tuesday.

"In the long run, the stock will respond to how they perform in the field," he said.

While shares of many U.S. energy producers have had sharp declines since oil prices began falling in late June, Continental's stock has fared worse. Its shares, which closed up 7.2% at $36.18 on Tuesday, have fallen by more than half since the end of August, and more than 25% since Mr. Hamm disclosed the company had sold the hedges.

A wildcatter -- he has called himself an "explorationist" -- Mr. Hamm started the company that would become Continental in 1967 and first struck oil in 1971 in Oklahoma. More than two decades ago, he began focusing on exploring the then-little-known Williston Basin, which stretches from South Dakota to the Canadian province of Saskatchewan. Over time, his company became a leader in the Bakken formation in North Dakota.

When oil prices are falling, hedges -- contracts that many energy companies buy to protect against declining prices by guaranteeing a minimum price for the oil and gas they produce -- become much more valuable. Continental notes that several of its competitors aren't hedged, including Apache Corp., which has no hedges on the books in 2015. Apache said it does have some production insured through the end of this year.

Continental's debt is smaller than many of its competitors at about 1.7 times its cash flow, according to S&P Capital IQ. And the company has $1.75 billion in unused credit, recent financial filings show.

Since selling Continental's hedges, Mr. Hamm has lost about $4.4 billion of his personal fortune as Continental's shares have fallen -- a loss that could be compounded by a divorce. A judge recently awarded the former Mrs. Hamm, Sue Ann Arnall, a nearly $1 billion settlement; she appealed that decision on Friday. Mr. Hamm now owns about $9.2 billion of company stock.

Some investors say Continental's primary acreage in the Bakken and elsewhere renders the hedging decision less important in the long-term.

Credit: By Erin Ailworth, Gregory Zuckerman and Daniel Gilbert

Subject: Petroleum industry; Crude oil prices; Investment policy; Hedge funds

Location: North Dakota

People: Hamm, Harold

Company / organization: Name: Continental Resources Inc; NAICS: 211111

Classification: 9190: United States; 3400: Investment analysis & personal finance; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.1

Publication year: 2014

Publication date: Dec 10, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634692654

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634692654?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Airline Profit Outlook Rises on Plunging Oil Prices; Net Profit for the Industry Is Projected To Be $19.9 billion This Year, Says Industry Body

Author: Wall, Robert

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract:

Net profit for the industry is projected to be $19.9 billion, the International Air Transport Association that represents more than 200 carriers said in a prepared statement on Wednesday.

Links: 360 Link to Full Text

Full text:

LONDON--The global airline industry's profit this year will be 10% greater than previously expected and climb further, bolstered by a sharp drop in oil prices, a leading industry organization forecasts.

Net profit for the industry is projected to be $19.9 billion, the International Air Transport Association that represents more than 200 carriers said in a prepared statement on Wednesday.

IATA raised its profit forecast from $18 billion in June even as it trimmed its outlook for total passenger numbers this year. Carriers are projected to deliver a collective profit of $25 billion next year, the industry group said.

Airlines are particularly exposed to swings in oil prices. Fuel typically represents about 30% of their operating costs. Oil prices have plunged more than 40% since their June high.

"There is no doubt that the recent fall in the oil price is a relief for airlines," Tony Tyler, IATA's director general, said in the statement.

The industry's anticipated full-year fuel bill has shrunk by $6 billion since midyear and should end 2.4% below last year's level. Carriers next year are expected to spend 5.6% less on fuel even as total consumption rises 5.1% by volume and traffic rises 7%, IATA said.

Passengers should see some benefit. IATA projected average fares will fall 5.1% next year.

This year's return should mark the fifth successive year of profits for an industry notorious for losing money. Airlines made a combined profit of $10.6 billion in 2013 and $6.1 billion the year before.

Airlines in North America are poised to clock the biggest profit this year and next, at $11.9 billion and $13.2 billion, respectively, IATA said. The group said carriers in all regions should be profitable next year, and that European airlines should see the biggest jump in profit.

Europe's carriers have benefited less than U.S. rivals from plunging oil prices because many have used hedging to lock in costs for the year. European airline-industry profit should rise to $4 billion next year as carriers catch up on fuel-cost savings with U.S. and Asian carriers, which IATA projects will return a combined $5 billion in profit.

Globally, industry profit margins remain thin, though, at 2.7% this year and a projected 3.2% next year. "Given all the risks in the world today--economic uncertainty, political instability, public-health emergencies and terrorism among them--there is not much of a buffer to absorb a significant change for the worse in the operating environment," said IATA's Mr. Tyler.

Write to Robert Wall at

Credit: By Robert Wall

Subject: Airlines; Prices; Cost control; Profit margins; Airline industry

Location: United States--US

People: Tyler, Tony

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 10, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634693606

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634693606?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Japan Airlines Flies on More Than Cheap Oil

Author: Bhattacharya, ByAbheek

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]Japan's ANA Holdings, which operates All Nippon Airways, has hedged 85% of its fuel costs, and Singapore Airlines roughly 60% for the fiscal year ending next March, says Credit Suisse's Timothy Ross.

Links: 360 Link to Full Text

Full text:

Of all the airline stocks cheap oil has sent aloft, Japan Airlines also has the benefit of generating its own wind beneath its wings.

Crude oil's collapse has slashed a key cost for airlines and made this sector an investor darling. Still, oil helps some firms more than others. One factor here is how much a carrier hedges its fuel costs.

For instance, Japan's ANA Holdings, which operates All Nippon Airways, has hedged 85% of its fuel costs, and Singapore Airlines roughly 60% for the fiscal year ending next March, says Credit Suisse's Timothy Ross. Cheaper oil may not matter as much for these firms.

In contrast, Japan Airlines, or JAL, has hedged only 40% of its fuel costs for this fiscal year and 20% next year. That makes the lower oil price a meaningful tailwind. If jet fuel prices keep falling, every $1 drop will cut JAL's fuel costs by 2.3 billion yen ($19.3 million), or 0.8% of last year's fuel bill.

It isn't just cheap oil that makes JAL attractive. The airline has become impressively efficient since emerging from bankruptcy in 2011. Some debts were forgiven, it stopped flying unprofitable routes, and it even reduced head count by a third, almost unthinkable given Japan's tight labor laws. A weaker yen could have a negative impact on outbound international travel, but so far it has been made up with strong inbound passenger numbers.

JAL's cash return on invested capital--a measure of efficiency that strips out noncash charges such as depreciation--has averaged 40% the last three years, according to FactSet. This may be the highest in the world. Hong Kong-based Cathay Pacific returned an average 10.4% during this time, Singapore Airlines 14.4% and ANA 13.9%. Even Delta Air Lines, whose phoenix-like recovery has propelled its shares, only managed a 25.6% return on invested capital.

JAL shares have soared almost 40% since oil began its slide in June, but that doesn't mean they are expensive. JAL's enterprise value, after adjusting for net cash, is 4.4 times forward earnings before interest, tax, depreciation and amortization. ANA commands 6.3 times. The global average is 8 times. JAL's valuations may get a lift if it receives a credit rating next year and is included in a major Japanese stock index.

Cheap oil isn't a full blessing for airlines, since it partly reflects slower global growth. But in a sector where most things often go wrong, JAL has several things going just right.

Write to Abheek Bhattacharya at

Credit: ByAbheek Bhattacharya

Subject: Airlines; Airline industry; Costs

Location: Japan

Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: Delta Air Lines Inc; NAICS: 481111; Name: Cathay Pacific Airways Ltd; NAICS: 481111; Name: Japan Airlines Corp; NAICS: 481111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publicationyear: 2014

Publication date: Dec 10, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634708250

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634708250?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Tumble Amid Global Supply Glut; Prices at Lows Not Seen Since Global Recession in 2009, Further Declines Expected

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract:

The amount of crude that refiners and traders have on hand rose by 1.5 million in the week ended Dec. 5 to 380.8 million barrels, enough to keep the nation's refineries humming at their current rates for about 23 days, according to the U.S. Energy Information Administration. Money managers added to their net bullish position in both the Nymex and Brent markets in the week ended Dec. 2, according to the most recently available data from the U.S. Commodity Futures Trading Commission and Intercontinental Exchange Inc. Trying to guess where prices will bottom out is too risky for John McLane, president of Mobius Asset Management, which manages $6.5 million.

Links: 360 Link to Full Text

Full text:

Oil prices took another tumble on Wednesday to fresh five-year lows on signs that the global supply glut driving the selloff is deepening.

New data out of the U.S., the world's biggest oil consumer, showed an unexpected increase in crude supplies last week. Meanwhile, the latest projections from the Organization of the Petroleum Exporting Countries .

The benchmark U.S. oil price slid 4.5% to $60.94 a barrel, the lowest level since July 2009 on the New York Mercantile Exchange. It was the biggest one-day drop since Nov. 28, the session that followed OPEC's decision to maintain its oil-output target.

Brent crude, a gauge of global prices, fell 3.9%, or $2.60, to $64.24 a barrel, also the lowest since July 2009 on ICE Futures Europe.

The latest plunge in crude rippled . The Dow Jones Industrial Average dropped 268.05 points, or 1.5%, to 17533.15, its biggest one-day decline since Oct. 9. Energy stocks were the worst-performing sector of the S&P 500 on Wednesday, with oil companies among the day's biggest laggards.

As prices have plunged more than 40% in about six months, market watchers have scrambled to adjust forecasts and explain the glut of oil that is forcing producers to cut prices as they compete for buyers. Supply growth, particularly in the U.S., exceeded expectations, while demand growth has been moderate due to a slowdown in China and Europe.

"What I'm looking at is a market that has no reason yet to bounce," said Jan Stuart, global energy economist at Credit Suisse Group AG. "OPEC basically put itself out of play. [...] There's no indication that [the market is] getting any less weak."

OPEC, which controls about one-third of global oil production, , even though demand for OPEC crude is expected to fall below that level. OPEC said Wednesday that demand for its oil will decline to 28.9 million barrels a day in 2015, down from 29.4 million barrels a day in 2014.

U.S. crude-oil output last week rose to 9.1 million barrels a day, the highest level since 1983, according to the EIA.

"Obviously there's still unabated strength in the production sector," said John Kilduff, founding partner of Again Capital in New York. "This is just feeding on itself."

Oil companies that have made big bets on shale-rock formation in the U.S., a resource that became economically feasible to tap with the advent of new drilling technology, have become victims of their own success. Their shares have been pummeled by the decline in oil prices, which is likely to cut deeply into their revenues. Continental Resources Inc. fell 7.3%, Penn Virginia Corp. fell 4.6% and Whiting Petroleum Corp. declined 10%.

Even bigger energy companies with more diversified operations took a hit on Wednesday.

These companies have raced to adjust their production and spending plans to suit an environment of sharply lower oil prices.

BP PLC, which has aggressively slimmed down since the 2010 Deepwater Horizon disaster, , outlining plans Wednesday to book $1 billion in restructuring charges over the next year and reduce spending on development by as much as $2 billion. U.S. oil giant ConocoPhillips also rattled the market earlier this week .

But plans to cut investment in new production in the U.S. won't immediately lower global oil supplies, said Jack Rivkin, chief investment officer at Altegris Advisors LLC, which oversees about $2.5 billion.

"In the meantime, everybody else around the world is in the same position: They need the revenues," he said. "It's going to take an improvement in global economies to actually create a true bottom here in oil prices."

Most of Altegris's managed-futures funds have wagers that oil prices will fall, Mr. Rivkin said.

Oil prices have sunk even as money managers, including hedge funds, have added to their aggregate bet that prices will rise. Money managers added to their net bullish position in both the Nymex and Brent markets in the week ended Dec. 2, according to the most recently available data from the U.S. Commodity Futures Trading Commission and Intercontinental Exchange Inc.

Trying to guess where prices will bottom out is too risky for John McLane, president of Mobius Asset Management, which manages $6.5 million. Mr. McLane has small wagers that oil prices will fall but is holding most of his energy fund in cash.

"People always use the expression, 'Catching a hot knife.' This is like catching a nuclear bomb," he said. "This does not have any twinge of stopping."

Gasoline futures fell 8.51 cents, or 4.9%, to $1.6385 a gallon. Diesel slid 4.31 cents, or 2.1%, to $2.0409 a gallon.

Summer Said contributed to this article.

Write to Nicole Friedman at

Credit: By Nicole Friedman

Subject: Petroleum industry; Supply & demand; Crude oil prices; Petroleum production

Location: United States--US

People: Glasenberg, Ivan

Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 10, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634708319

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634708319?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

OPEC Sees Less Demand for Its Oil in 2015; Producer Group Says It Cut Its Output Last Month

Author: Said, Summer

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

OPEC cut its collective oil output to just above the producer group's targeted production ceiling last month, but it expects demand for its oil to be well below the level at which it is currently pumping next year as the U.S. shale boom persists.

In its latest monthly report, the Organization of the Petroleum Exporting Countries said its collective crude-oil production declined by 390,100 barrels a day to 30.05 million barrels a day in November, compared with October. That is just a touch above OPEC's output ceiling of 30 million barrels a day--a level the cartel agreed to stick to , despite calls from some of its members for more dramatic production cuts to counter the sharp fall in oil prices since the summer.

OPEC trimmed its forecast for demand for its oil by 300,000 barrels a day, to 28.9 million a day next year, compared with 29.4 million barrels a day in 2014. If OPEC were to produce at that level in 2015, it would be its lowest output since 2003 when it pumped 27.048 million barrels a day, according to data published on the OPEC website.

"The downward revision reflects the upward adjustment of non-OPEC supply as well as the downward revision in global demand," OPEC said in the report.

The trimmed forecast, along with a surprise increase in U.S. crude stockpiles, pushed oil prices sharply lower on Wednesday. The benchmark U.S. oil price recently was 4% lower at $61.22 a barrel on the New York Mercantile Exchange. The weekly reading signals a potential deepening of a global glut that has sent crude-oil prices plunging more than 40% in nearly six months.

The drop in OPEC's November production, meanwhile, was driven largely by lower Libya crude output, which OPEC said fell by about 248,300 barrels a day to 638,000 barrels a day. Saudi Arabia's November output fell by 60,100 barrels a day to 9.59 million barrels a day, while Kuwait output dropped by 59,400 barrels a day to 2.69 million barrels a day, the report said.

OPEC bases its output figures estimates on secondary sources, such as shipping trackers and energy consultancies.

OPEC also trimmed its forecasts for world oil demand. Demand in 2014 is expected to grow by 930,000 barrels a day to average around 91.13 million barrels a day, a reduction of 120,000 barrels a day from last month's estimate.

For 2015, world fuel consumption will rise by 1.12 million barrels a day to average 92.26 million a day, or about 70,000 barrels a day lower than OPECs' expectation last month.

OPEC also raised its forecasts for oil supply from outside the group by 40,000 to 55.95 million barrels a day in 2014. Non-OPEC supply was also increased by 120,000 barrels a day to 57.31 million a day in 2015, mainly due to higher output from the U.S., Canada and Brazil.

The sharp drop in oil prices--and the related glut of supply--have sent global energy companies scrambling. BP on Wednesday outlined plans to book $1 billion in restructuring charges over the next year and reduce spending on development by as much as $2 billion. Those moves followed plans from ConocoPhillips, which earlier this week said it would reduce capital spending next year by 20%.

Write to Summer Said at

Credit: By Summer Said

Subject: Petroleum industry; Supply & demand; Capital expenditures; Crude oil prices; Petroleum production

Location: United States--US

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 10, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634708326

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634708326?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Price Fall Deepens BOJ Policy Board Rift; Opponents to October's Easing May Reject Push to 'Mechanically' Ease

Author: Ito, Tatsuo; Nakamichi, Takashi

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]one development that has thwarted the expectations of the members who backed the easing is that oil prices have continued to slide. Since the BOJ's action, global oil prices have dropped about 20%, particularly after members of the Organization of the Petroleum Exporting Countries last month turned down calls to cut their oil output.

Links: 360 Link to Full Text

Full text:

TOKYO--The continued fall in crude oil prices is deepening a rift among Bank of Japan policy-board members, indicating that some of them may reject any push for extra stimulus next year.

The BOJ surprised markets on Oct. 31 with its decision to ramp up its easing measures to prevent concerns about falling prices from springing back to life, triggered by a sharp drop in oil prices and weakening inflation expectations.

The decision, which passed by a thin majority, pushed down the yen more than 10% against the dollar and drove up Japanese share prices to a seven-and-a-half-year high before their retreat this week.

The market's vigorous reaction to the decision appeared to offer a tailwind that would enable the BOJ to achieve its long-standing 2% inflation target. But one development that has thwarted the expectations of the members who backed the easing is that oil prices have continued to slide.

Since the BOJ's action, global oil prices have dropped about 20%, particularly after members of the Organization of the Petroleum Exporting Countries last month turned down calls to cut their oil output.

The decline has fueled speculation among market participants that the BOJ will be eventually forced to do something next year, even though BOJ officials have ruled out any incremental action.

Overseas investors take it for granted that the BOJ will act again if oil prices as well as inflation expectations go down, said Yunosuke Ikeda, chief currency strategist at Nomura Securities. "If that isn't the case, [investors] could move to unwind oversized yen-selling positions," he added.

The presumption that the BOJ will be backed into a corner is something that the four board members who voted against the extra action had feared, people familiar with the BOJ's policy say.

They say that even if crude prices stay weak, the policy board members who voted against additional easing in October wouldn't give in to pressure to automatically ease.

Even one member who voted in favor of easing made her stance clear in November. Sayuri Shirai told reporters in Hiroshima that a downward revision in the BOJ's views "won't mechanically lead to further steps."

At the October meeting, some of the four opponents voiced concerns that steering monetary policy with a close focus on unpredictable oil prices is risky, potentially resulting in the board being forced to ease whenever oil prices sink further, two of the people close to the BOJ said.

Such a view, however, wasn't reflected in the minutes of that meeting in which some of the dissenters cited potential side effects of the BOJ's latest steps, including the concern that by effectively buying all new issuance of government debt the bank might be seen as merely funding government deficits.

One of the people close to the BOJ said the dissenters appear to be more united against views advocated by Gov. Haruhiko Kuroda and his colleagues supporting him, saying recent slides in oil prices will likely be a key point of discussion when the policy board meets next week.

There will be no change to the BOJ's policy at the meeting, however, as they are still assessing the effects of the latest easing, central bank watchers say.

But a test for the BOJ could come soon when the central bank issues an interim update on its outlook for growth and prices in January.

In October, the BOJ's median forecast for prices predicted that the nationwide consumer-price index--factoring out perishable food and the impact of a tax hike in April--would rise 1.7% in the fiscal year starting in April 2015, a level within reach of its 2.0% target in about a two-year time-frame.

Japan's CPI grew 0.9% in October, marking its weakest growth in a year.

With the fall in oil prices, the BOJ will likely have no choice but to cut its price forecast again in January, some of the people familiar with the BOJ's thinking, as well as private economists, say.

The lowered expectations could stoke speculation for further action, or it could force Mr. Kuroda to push back the timing of when the price target will be reached if the BOJ refrains from fresh action, one of the people said.

Another person close to the BOJ said the nine-policy board members from the outset were at odds over Mr. Kuroda's strong commitment to achieving the 2% target in about two years. But as the deadline approaches, the conflicting viewpoints have unexpectedly come into the spotlight in the form of the 5-4 vote, the person added.

Write to Tatsuo Ito at and Takashi Nakamichi at

Credit: By Tatsuo Ito And Takashi Nakamichi

Subject: Petroleum industry; Central banks; Meetings; Consumer Price Index; Crude oil prices

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 10, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634708486

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634708486?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Uganda in Final Phase of Talks With Oil Refinery Bidders; Up to $4 Billion Project Will Create 60,000 Barrels a Day Oil Refinery

Author: Bariyo, Nicholas

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract:

The refinery contract is also viewed as the final development of the country's oil fields, now estimated to contain some 6.5 billion barrels of crude oil and 500 billion cubic feet of natural gas.

Links: 360 Link to Full Text

Full text:

KAMPALA, Uganda--The Ugandan government has entered the final phase of talks with two consortia from Russia and South Korea expecting to announce the final bidder for its maiden oil refinery in February next year, the energy and minerals ministry said on Wednesday.

After weeks of talks, the government asked the consortium led by Korea's SK Group and another led by RT Global Resources from Russia to present their final technical and financial offers by January 19, Fred Kabagambe Kaliisa, the ministry's permanent secretary said.

The bidding process now enters its most decisive phase which will see the country issue its largest ever contract in the energy sector allowing the construction of a 60,000 barrels-a-day refinery. The project is expected to cost up to $4 billion.

"The bidders will prepare and submit their refined technical, financial and commercial and legal offers," the ministry said. "They will also detail their financial and long-term business plans and review the terms of the different project agreements proposed by government."

But the development also comes as crushing oil prices are putting global oil companies under pressure to rethink expenditure on new projects. Analysts have warned that projects in frontier markets are particularly at a greater risk. Company officials couldn't be reached for immediate comment.

In June, Uganda selected the two bidders from a group of six companies and was initially expected to announce the winning bidder in December. Mr. Kaliisa said that during negotiations, SK Group and RT Global Resources asked for an incentive package which required additional time for consultations with other government agencies, delaying the final selection.

The refinery contract is also viewed as the final development of the country's oil fields, now estimated to contain some 6.5 billion barrels of crude oil and 500 billion cubic feet of natural gas. Oil production is expected to start by 2018, hitting plateau production of around 220,000 barrels-a-day by around 2022.

Write to Nicholas Bariyo at

Credit: By Nicholas Bariyo

Subject: Petroleum refineries; Petroleum industry; Petroleum production

Location: Uganda Russia South Korea

Company / organization: Name: SK Group; NAICS: 324110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 10, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634745872

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634745872?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

U.S. Stocks Tumble Along With Oil Prices; Crude-Oil Futures Settle at New Five-Year Low

Author: Strumpf, Dan; Vaishampayan, Saumya

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract:

Energy companies in the S&P 600 index of small-capitalization companies fell 4.3%. Since midyear, more than half the value of companies in the index has been wiped out amid the drop in oil prices. While a decline in oil prices is a drag on earnings for energy companies, it could benefit earnings in the industrial and retail sectors, said Paul Atkinson, who oversees $3 billion as head of North American equities at Aberdeen Asset Management.

Links: 360 Link to Full Text

Full text:

U.S. stocks tumbled Wednesday after a renewed downturn in oil prices rattled investors and led to sharp declines in already battered energy shares.

The Dow Jones Industrial Average declined 268.05 points, or 1.5%, to 17533.15, its biggest one-day decline since Oct. 9.

The S&P 500 index dropped 33.68 points, or 1.6%, to 2026.14. The Nasdaq Composite Index fell 82.44 points, or 1.7%, to 4684.03.

The declines were market wide. Hardest hit were shares of U.S. energy producers, whose fortunes are closely tied to the price of oil. But shares of materials, industrials and technology companies were also down sharply. All 10 major market sectors declined.

Traders and investors attributed the slide to the , spurred by an unexpected jump in domestic oil stockpiles that underscored the scale of the U.S. oil glut. Benchmark U.S. crude tumbled 4.5% to $60.94 a barrel, its lowest level since July 2009.

However, several traders said there was a noted absence of panic selling, and volumes weren't unusually heavy given the size of the move. Magnifying the day's slide, they said, was some end-of-year jockeying by investors, who often sell losing bets toward the end of the year as a way to reduce tax bills, putting pressure on hard-hit corners of the market--in this case energy stocks.

"Energy and crude is what's driving the boat," said Bill Nichols, head of U.S. equities at Cantor Fitzgerald. "You get this sort of 'sell everything' mentality."

Despite Wednesday's slide, major indexes remain close to record territory. The Dow is just 2.4% off its record high hit on Friday.

Other markets also saw large moves Wednesday. The yield on the 10-year Treasury note fell to a two-month low of 2.169% as investors fled to safe-haven government bonds. The U.S. dollar fell 1.2% versus the yen.

Much of the day's focus, however, surrounded the sharp drop in energy stocks. Chevron Corp. shares fell 2% and Exxon Mobil Corp. shares lost 3%. ConocoPhillips lost 2.2%.

BP PLC said it expects to book $1 billion in restructuring charges over the next year. U.S.-listed shares of BP fell 2%.

Even harder hit were shares of small oil-and-gas producers, many of which took on heavy debt loads that are coming under scrutiny amid lower oil prices. Energy companies in the S&P 600 index of small-capitalization companies fell 4.3%. Since midyear, more than half the value of companies in the index has been wiped out amid the drop in oil prices.

Among small producers posting big declines were Triangle Petroleum Corp., which fell 8.6%, Comstock Resources Inc., off 10.8%, and Goodrich Petroleum Corp. , down 8.8%.

The pullback in stocks this week comes after seven straight weeks of gains for the Dow and S&P.

"The energy stocks themselves, as well as other names that were linked to energy, were all lower," said Jesse Lubarsky, senior vice president and equity trader at Raymond James.

Many investors have said the drop in oil prices should benefit stocks in the long run, as falling gasoline prices boosts consumer spending. While a decline in oil prices is a drag on earnings for energy companies, it could benefit earnings in the industrial and retail sectors, said Paul Atkinson, who oversees $3 billion as head of North American equities at Aberdeen Asset Management.

"Overall...the benefits of lower oil prices will come through and that will offset the problems at energy companies," he said. He said he is looking to increase his exposure to the energy sector because he doesn't believe this pullback in oil prices is permanent.

As U.S. stocks enter the sixth year of the bull market, many investors have said the continued economic recovery and growth in corporate profit can propel stocks higher. Even as the Federal Reserve begins to raise short-term interest rates, its actions could be offset by easing efforts at other major central banks. That should help keep global interest rates low, adding to the appeal of stocks against other assets.

"The fact that we are in the middle of an expanding economy with growing profits and low interest rates ought to be enough to keep us going," said Steven Wieting, global chief investment strategist at Citi Private Bank, referring to further gains in U.S. stocks.

No major economic reports were scheduled for release Wednesday. Later in the week, investors will watch for November data on retail sales and producer prices. The Federal Reserve's policy statement, due at the end of its two-day meeting on Dec. 17, is also likely to attract attention.

In overseas action, Greek stocks continued to fall amid political uncertainty in the country. Earlier this week, the Greek government sped up the timeline for a key vote in parliament. The Stoxx Europe 600 fell 0.3%.

Stock-market action was mixed in Asia. China's Shanghai Composite Index rose 2.9%, while Japan's Nikkei Stock Average fell 2.25%.

Gold futures fell 0.2% to $1228.90 an ounce.

Write to Dan Strumpf at and Saumya Vaishampayan at

Credit: By Dan Strumpf and Saumya Vaishampayan

Subject: Petroleum industry; Energy industry; Interest rates; Stock exchanges; Prices; Dow Jones averages

Location: United States--US

People: Wieting, Steven

Company / organization: Name: Goodrich Petroleum Corp; NAICS: 211111; Name: Comstock Resources Inc; NAICS: 211111; Name: Triangle Petroleum Corp; NAICS: 211112; Name: Chevron Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 10, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634745963

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634745963?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

The Peak of 'Peak Oil' Has Been Postponed Yet Again; fuel supply will always satisfy demand at a price and that technology and entrepreneurship will be stimulated to add to supply the higher the price.

Author: Anonymous

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

History will certainly repeat itself, again. The editorial (Dec. 5) is spot on in predicting that fuel supply will always satisfy demand at a price, and that technology and entrepreneurship will be stimulated to add to supply the higher the price. But three other important historical patterns also will be repeated in oil markets.

Auto shoppers have a short-term perspective and will respond to lower gasoline prices today by bulking up, and the U.S. will lock in future demand for gasoline in the form of vehicles with an average life expectancy of 16 years. It is not surprising that 47% of last month's domestic auto sales were SUVs and light trucks--the same demand response that occurred after oil prices collapsed in 1986.

Oil drillers will only maintain idle rigs for a limited time before they are sold for scrap. Worse, if oil prices eviscerate the demand for drilling new wells, drillers will dismiss skilled workers as required by market forces. We saw that after the OPEC-engineered oil-price collapse in 1997-98 crushed the domestic drilling industry, and drilling was later slow to rebound in response to higher prices.

Saudi Arabia, the world's lowest-cost producer, will never play a classic role and increase production as long as marginal output is profitable.

Letting free markets work will always provide the optimal mix of supply and demand. However, it is foolhardy to believe that we are operating in a free market for oil when the low-cost producer, accounting for 10% of the world's production, doesn't react to price signals. Pretending otherwise is to condemn us to the same historic roller-coaster ride during which our domestic production surges and is then crushed, followed by price spikes that precipitate recessions.

John Shages

Strategic Petroleum Consulting LLC

Washington

Mr. Shages was a deputy assistant secretary, petroleum reserves, at the Department of Energy 2003-07.

Standing atop the pyramid of finite-resource alarmists and exploiters are those who can convert insecurities about raw materials into raw political power.

As America's fracking revolution once again debunks end-of-oil myths, many in the political class will push the same green-energy agenda forward as a response to the planet's limited supply of clean air and water. Even though fossil-fuel suppliers refuse to comply with predictions of doomsayers, anticarbon forces will try to finish their oil exorcism based on oil's threat to other scarce resources. Better yet, the same rationale can be used by those who wish to consolidate and ratchet up collective nation-state power into global governance bodies. The ingenuity of entrepreneurs can slow the concentration and centralization of state power, but public-sector resource protectors and allocators are every bit as enduring and slick as fossil fuels.

John Finley

Hampton, Va.

Peak oil hasn't been debunked as you claim. Conventional oil is gone forever. We're finding more natural gas but less and less oil world-wide. The supermajors like BP, Total and Shell prove how difficult it is by posting deplorable reserve replacement rates. Even giant Exxon can't avoid oil's decline. Its 2013-14, production was nearly 50% natural gas. Exxon's upstream production declined from 4.21 million barrels of oil equivalent per day in 2004 to 4.17 in 2013. We might listen again to James Schlesinger, our first energy secretary's warning: "Society ignoring this [peak oil] is like the people of Pompeii ignoring the rumblings below Vesuvius."

Ronald Ferland

Bluffton, S.C.

You are correct in that no one can predict with any accuracy when the world will run out of oil. Current extraction processes are hardly efficient, so that two or three barrels remain in the ground for every barrel that has been pumped out in the last 130 years. Methods will be developed that can extract that oil, as well as the billions of barrels that are yet to be discovered. Nevertheless, the supply of oil is not infinite and eventually it will all be gone, be it hundreds, thousands or tens of thousands of years.

Martin Jacobson

Lincoln, Calif.

Subject: Supply & demand; Petroleum industry; Energy policy; Gasoline prices

Location: United States--US

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 10, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634833238

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634833238?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

How Cheaper Oil Affects U.S. Factories; Winners Are Consuming Energy and Losers Are Those Supplying Drill Firms

Author: Aeppel, Timothy

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]energy development has been a hot spot in the post-recession U.S. economy, benefiting producers of everything from steel pipes and valves to earthmovers. "The fall in oil definitely cuts both ways, but I see the net demand for manufacturers going up," as it stimulates more spending in other parts of the economy, said Dan North, lead economist for North America at Euler Hermes Economic Research in Owings Mill, Md. He points to auto sales, which notched their strongest November sales rate since 2003 last month.

Links: 360 Link to Full Text

Full text:

Cheaper oil is creating winners and losers among America's factories.

Manufacturers who use oil and products derived from it are saving big money. But energy development has been a hot spot in the post-recession U.S. economy, benefiting producers of everything from steel pipes and valves to earthmovers. Those companies are now being squeezed.

Among those feeling the pinch is Dover Corp., which earns a quarter of its revenue from selling pumps and other heavy equipment to energy companies.

"Clearly there are near-term challenges in front of us," Chief Executive Bob Livingston told investors in New York on Monday. Dover said it hasn't yet seen a pullback in oil drilling, but the company is cutting costs and re-evaluating some investments in anticipation of reduced oil exploration in the U.S. next year. General Electric Co. in October cut projections for future growth in its oil and gas business, adding it was monitoring the sector with "caution."

Rockwell Automation Inc. also is weighing what cheaper oil means for its bottom line. The industrial equipment maker counts on the oil and gas industry for about 12% of its sales. CEO Keith Nosbusch said there is a "teeter-totter" taking place across the economy as businesses that benefit from cheaper oil prepare for more sales, while others move to retrench.

"Everyone who uses oil as a feed stock--from chemicals to consumer industries--are going to benefit," he said. That could mean more sales of Rockwell's industrial controls, motors and sensors to those industries. Meanwhile, oil drillers won't stop investments entirely, he said, and are likely to spend more on productivity-enhancing equipment. Rockwell, for instance, sells devices that let drillers monitor the output from wells without sending workers around in pickups to record measurements at each drilling site, shaving labor costs.

U.S. manufacturing has been a bright spot in the recovery, though it is far from booming. Manufacturing output grew 3.4% over the past year and finally recovered this past summer to its prerecession level, according to the Federal Reserve.

How falling oil prices impact manufacturers will depend on how low crude goes and how long it stays there. Oil continued its slide Wednesday after the Organization of the Petroleum Exporting Countries cut forecasts for global demand for its oil next year. The benchmark U.S. oil price on Wednesday fell to $60.94 a barrel, the lowest level since July 2009 on the New York Mercantile Exchange.

If prices fall much further and stay down, it will mean sharp cuts in investments that reverberate through the manufacturing supply chain. ConocoPhillips became the first oil major to announce such a move, earlier this week saying it would cut its capital spending to $13.5 billion next year, down 20% from this year's level.

Still, the larger picture for manufacturers remains positive.

"The fall in oil definitely cuts both ways, but I see the net demand for manufacturers going up," as it stimulates more spending in other parts of the economy, said Dan North, lead economist for North America at Euler Hermes Economic Research in Owings Mill, Md. He points to auto sales, which notched their strongest November sales rate since 2003 last month.

"I don't think it's a coincidence that we're getting sharp increases in [auto] sales at a time of sharp decreases in gas prices," said Mr. North.

Goodyear Tire & Rubber Co. supplies tires to companies that do oil exploration and acknowledges its sales to those companies may decline in the months ahead. But that is far outweighed by the benefits Goodyear gets from cheaper oil, said spokesman Keith Price. Two-thirds of the company's raw materials are derived from petroleum, including synthetic rubber and carbon black.

The company reported its raw material costs fell 6% year-over-year in the third quarter, though part of that reflects cheaper natural rubber. It takes time for lower oil prices to filter through to its suppliers, which is why Goodyear predicts its raw material bill will keep falling through the first half of next year.

"But what really helps us," said Mr. Price, "is that as gas prices fall, people tend to drive more--so their tires wear out faster."

Don Norman, director of economic studies at the MAPI Foundation, a manufacturing research group in Arlington, Va., agrees cheaper oil benefits most manufacturers. "Overall it's a positive," he said. "Manufacturers benefit because of lower prices, including lower shipping costs. And consumers spending less on gas and heating oil means they'll be out shopping."

The farther a business is removed from the actual production of oil, the more clear the benefits. At Northland Aluminum Products Inc. in Minneapolis, for instance, orders for its trademark bunt pans and other baking gear surged in late September and CEO David Dalquist thinks falling oil prices are to thank.

With prices falling at the gas pump, Mr. Dalquist said retailers suddenly boosted orders for the holiday season. Business has now surged 15% above his projections made this summer. "We see a one-to-one relation between discretionary income and the price of gasoline," he said. Northland hasn't seen any declines in raw material prices, but Mr. Dalquist said he expects that eventually.

Ted Mann contributed to this article.

Write to Timothy Aeppel at

Credit: By Timothy Aeppel

Subject: Manufacturing; Petroleum industry; Industrial equipment; Prices; Investments; Capital expenditures; Recessions; Manufacturers; Energy industry; Raw materials; Steel pipes

Location: United States--US

People: Nosbusch, Keith D

Company / organization: Name: General Electric Co; NAICS: 334512, 334519, 332510, 334290; Name: New York Mercantile Exchange; NAICS: 523210; Name: Rockwell Automation Inc; NAICS: 334419, 334513, 335314, 334111, 334112; Name: Dover Corp; NAICS: 334513, 332919, 333921, 333318, 333517

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 10, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634873787

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634873787?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Gold Miners Find Little Solace in Cheaper Oil; Pressed by Falling Gold Prices to Cut Costs, Some Are Getting Creative

Author: MacDonald, Alistair

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

Falling oil prices have made it cheaper to mine gold, but the yellow metal's own three-year price decline is pressuring miners to come up with new, sometimes creative ways to cut costs and restructure. Barrick's failed merger attempt with Newmont Mining Corp. in April envisaged a spinoff, and executives continued to look at the idea after talks collapsed.

Links: 360 Link to Full Text

Full text:

Among other things, miners are drawing up plans to spin off assets and share administrative functions between companies.

As measured by the Market Vectors Gold Miners Index, the gold sector has rallied almost 19% since Nov. 4, buoyed by a 7% gain in gold and by cost reductions stemming from falling oil and a rising dollar. But analysts and investors say the biggest savings have already been reaped, and that to keep stock prices rising miners need to do the one thing they are not doing: merge with each other.

Gold prices are still down 37% from their 2011 highs, mainly as inflation, against which gold is traditionally a hedge, has remained low and investors have moved into securities that offer yields. That decline has spurred a yearslong scramble to cut costs. Miners have shaved an average of 20% off the cost of producing an ounce of gold in the past year, according to Dundee Capital Markets. That is mainly due to cuts in capital expenditure.

But with gold prices nearing break-even levels for many miners, some are seeking new solutions in a sector already reshaped by a three-year downturn. "The low-hanging fruit, on the cost side, has been picked," said Pawel Rajszel, an analyst at Veritas Investment Research. Mr. Rajszel said that in recent earnings reports, growth in savings has slowed.

Energy Intensive

Gold mining is an energy-intensive industry, which is why HSBC Securities calculates that a 20% fall in oil could reduce miners' overall costs by 2% to 6%. But not all miners will feel the full benefits. Around half of Barrick Gold Corp.'s exposure to oil is hedged at $86 a barrel. Some mine mainly underground, which uses less fuel than open-pit mining, where trucks ferry the rock around.

Analysts also point out a flip side to declining oil: It damps the inflation that boosts gold.

Another macroeconomic benefit has been the rising dollar, which lowers costs in countries where miners operate. Yamana Gold Inc.--which mines in Canada, Brazil, Argentina and Chile--says that for every 10% devaluation in these countries' currencies, its mining costs fall by $40 to $50 an ounce. Yamana's costs averaged $807 an ounce in the third quarter.

"The dollar and oil, it's a nice win," said Steve Letwin, chief executive of Iamgold Corp. "But you have to continue to make sustainable cost cuts, given how volatile gold and oil are."

Given this, miners are looking at other ways to cope with a lower gold price.

Some miners are considering spinoffs. Yamana announced on Wednesday that it would place some of its Brazilian assets into a new company that could be spun off to its investors. Yamana sees this as a way to separate higher-risk assets from the rest of its portfolio while allowing investors the option of still owning them.

Underscoring potential difficulties, the world's largest gold producer, Barrick, considered spinning off some of its mines but is currently not pursuing this option, say people familiar with the matter. Barrick's failed merger attempt with Newmont Mining Corp. in April envisaged a spinoff, and executives continued to look at the idea after talks collapsed. One problem cited was the difficulty of deciding how much Barrick debt the new company would take on, one of these people said.

Some bankers say companies are increasingly discussing forming joint ventures to share costs--such as power generation, geologists and regional offices--for mines that operate near each other. But recent precedent isn't good. Barrick and Newmont looked at this in Nevada, but talks have so far gone nowhere.

Sharing operations without combining companies is difficult. "Each company is going to have its own interest at heart," said Patrick Chidley, a mining analyst at HSBC Securities.

Some miners are looking at a limited form of such sharing, hoping to combine administrative functions where there is geographic overlap, rather than actual mining operations. Mr. Letwin said Iamgold has had very preliminary discussions with Newmont about sharing community- and government-relations functions, as well as some legal work in Suriname.

Such savings might not be significant enough, say analysts. Instead, they say, investors want to see more aggressive moves, such as full-scale mergers and shutting down unprofitable mines.

High Expectations

The long-expected consolidation in gold has yet to materialize. While the values of gold miners have fallen, the expectations of their owners have not.

Kirkland Lake Gold Inc. operates in an area of Ontario that has more than a dozen peer miners, many of which have just one asset but corporate offices and teams, said George Ogilvie, the company's CEO. Few are looking to merge, he said. "Sometimes it takes a little bit of time to sink in past a mentality of 'it is my company, maybe we can manage this,' " he said.

If gold prices fall further, consolidation will become inevitable, Mr. Ogilvie and others say.

"With gold at $1,100 it becomes miserable for some miners, and consolidation is inevitable," said Doug B. Groh, a fund manager at Tocqueville Asset Management LP, which owns gold stocks. "This is the point of no return."

Ben Dummett contributed to this article.

Write to Alistair MacDonald at

Credit: By Alistair MacDonald

Subject: Gold mines & mining; Gold markets; Mines; Prices; Investments; Capital expenditures; Cost control; Cost reduction

Company / organization: Name: Iamgold Corp; NAICS: 212221; Name: Barrick Gold Corp; NAICS: 212221

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634881360

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634881360?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Investors Sell Stocks as Oil Prices Keep Falling; Dow Slumps 268.05 Points, Its Biggest One-Day Drop in Two Months

Author: Friedman, Nicole; Strumpf, Dan; Said, Summer

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

Skittish investors, wary about the health of the world economy, pushed the Dow industrials to their largest decline in two months, propelled in part by reports of a deepening global oil glut that sent crude prices to five-year lows. The retreat from riskier assets and the embrace of securities perceived as safe underscores the fragile mind-set of many investors, analysts and traders said, following a 2014 rally that has taken stock and bond prices in many markets around the globe to near record levels.

Links: 360 Link to Full Text

Full text:

The benchmark U.S. oil price slid 4.5% on the New York Mercantile Exchange, to $60.94 a barrel, bringing year-to-date losses to 38%. The declines delivered the latest blow to an oil industry that just months ago was thought to be booming, as many analysts and observers predicted that crude prices would remain near $100 a barrel.

Other markets also saw large moves Wednesday, as investors bought government bonds perceived as safe, unwound bullish bets on the U.S. dollar, and sold riskier assets such as high-yield corporate, or "junk," bonds.

The retreat from riskier assets and the embrace of securities perceived as safe underscores the fragile mind-set of many investors, analysts and traders said, following a 2014 rally that has taken stock and bond prices in many markets around the globe to near record levels.

U.S. stocks are trading above their historical average valuations, many investors said, and the Dow industrials haven't had a 10% decline, known as a correction, for more than three years. Despite Wednesday's slide, major indexes remain close to record territory. The Dow is just 2.4% off its record hit on Friday and is up 5.8% for the year.

The steady gains in stocks amid mostly uneven U.S. growth has made some portfolio managers nervous that at least a temporary reversal could be in the offing.

"There's some global unease that has people wanting to take money off the table," said Jesse Lubarsky, senior vice president and equities trader at Raymond James. "We've had this nice rally for a while, but there are still worries."

New data on Wednesday out of the U.S., the world's biggest oil consumer, showed an unexpected increase in crude supplies last week. Meanwhile, the latest projections from the Organization of the Petroleum Exporting Countries point to lower demand for the cartel's oil in 2015.

The Dow Jones Industrial Average slumped to its biggest one-day point and percentage decline since Oct. 9, dropping 268.05 points, or 1.5%, to 17533.15.

The S&P 500 index fell 33.68 points, or 1.6%, to 2026.14.

Hardest hit were shares of U.S. energy producers, whose fortunes are closely tied to the price of oil.

Shares in Exxon Mobil Corp. lost 3%, ConocoPhillips slid 2.2% and Chevron Corp. dropped 2%. Among small producers, Comstock Resources Inc. tumbled 11%, Goodrich Petroleum Corp. slipped 8.8% and Triangle Petroleum Corp. fell 8.6%.

Shares of materials, industrials and technology companies also tumbled. All 10 major market sectors declined.

To be sure, there is good news for the world economy in falling energy prices. Declining fuel costs stand to put more money in household coffers and boost consumer spending in a shift that economists expect will bolster growth in the world's largest economies.

But concerns about the global growth outlook and fears of deflation, a damaging spiral of falling prices and slowing spending, in some regions such as Japan and Europe continue to compete with the crude drop for investors' attention.

The dollar, usually considered a safe haven, has fallen against the yen and the euro since Friday, including a 1.6% drop against the Japanese currency on Wednesday.

Investors appear to be taking advantage of periods of uncertainty to take profits on dollar bets that have appreciated substantially this year.

The 10-year Treasury note rallied, sending its yield to near a two-month low of 2.169%. Driving the shifts: concerns that the drop in oil prices would weigh on already-low inflation in Europe and Asia.

A number of big banks, including Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley, have lowered their forecasts in recent months as prices have fallen well below expectations.

In mid-June, when prices started falling, most market watchers thought that geopolitics posed a danger to oil supplies, as insurgents had recently entered Iraq and Libyan exports were uncertain due to unrest. Since then, production from both Iraq and Libya has increased, surprising many and augmenting the output of oil coming from the U.S., which is at its highest level since 1986.

Some observers expected OPEC to announce a production cut right up until the group's Nov. 27 meeting. The cartel decided to maintain output levels. Some saw the inaction as a new era for the oil market in which the cartel has less power, while others said the group is likely to reassert its strength by announcing a production cut early in 2015.

Wednesday was the biggest one-day drop in the oil price since Nov. 28, the session that followed OPEC's decision to maintain its oil-output target. OPEC's agreement to stand pat was the latest catalyst for a selloff that began in June.

Last week, Credit Suisse Group AG called for Brent crude, the global oil benchmark, to average $75.25 and Nymex oil to average $70 in 2015, down from its earlier forecasts of $91.50 and $84.50, respectively. Brent crude finished Wednesday at $64.24 a barrel, down 3.9% on the day.

"What I'm looking at is a market that has no reason yet to bounce," said Jan Stuart, global energy economist at Credit Suisse. "There's no indication that [the market is] getting any less weak."

Mr. Stuart said he believes oil prices will bottom out in the first quarter. After that, he expects reduced investment will lead to slower production growth at the same time demand strengthens.

James Ramage contributed to this article.

Write to Nicole Friedman at, Dan Strumpf at and Summer Said at

Credit: By Nicole Friedman, Dan Strumpf and Summer Said

Subject: Petroleum industry; Prices; Investments; Dow Jones averages

Location: United States--US

Company / organization: Name: Triangle Petroleum Corp; NAICS: 211112; Name: Goodrich Petroleum Corp; NAICS: 211111; Name: Comstock Resources Inc; NAICS: 211111; Name: Chevron Corp; NAICS: 324110, 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634884870

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634884870?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Australia's Santos Trims Spending as Oil Slips; Australia's Third-Largest Oil Company by Output Plans to Spend $1.66 Billion on New Ventures in 2015

Author: Ross, Kelly

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

The Adelaide-based company is completing construction of an US$18.5 billion gas-export joint venture with Total SA in Australia's Queensland state--a giant project that investors fear will put too much strain on its balance sheet in a low-oil-price environment.

Links: 360 Link to Full Text

Full text:

SYDNEY--Australia's Santos Ltd. said it would slash capital spending by 26% next year and consider asset sales, as it tries to fortify its balance sheet against tumbling oil prices.

Australia's third-largest oil company by output said it plans to spend 2.0 billion Australian dollars (US$1.66 billion) on new ventures in 2015, down from previous guidance for A$2.7 billion.

While asset sales are also under consideration, the company said it has a "robust funding position".

Credit Suisse this week called on Santos to issue new shares in the company at a discount to raise at least A$2.5 billion in equity. On Thursday, Santos said it has no such plans.

"The company has no present need or intention to raise equity," David Knox, Santos's chief executive, said in a statement. Among Australia's large-cap oil companies, Santos has been the hardest hit by .

Santos shares fell another 5.7% on Thursday amid a continued slide in oil prices, extending their losses to 38% since the Organization of the Petroleum Exporting Countries last month sent turmoil through global markets by .

Meanwhile, Origin Energy Ltd., which is building a rival gas-export plant in Queensland with ConocoPhillips, said Thursday it has renegotiated its loan facility for the project. The loan has been increased by A$750 million to A$7.4 billion, Origin said, adding that its maturity has been extended and the cost of interest reduced.

The economics of the project remain "robust" in the current oil-price environment, Origin said.

Write to Ross Kelly at

Credit: By Ross Kelly

Subject: Petroleum industry; Balance sheets

Location: Australia United States--US Queensland Australia

Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Origin Energy Ltd; NAICS: 221210; Name: Credit Suisse Group; NAICS: 522110; Name: Total SA; NAICS: 447190, 324110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634884915

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/163 4884915?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil's Fall Puts a Chill on U.S. Drilling; Energy Firms Slash Spending, Staff as Crude's Decline Accelerates

Author: Cook, Lynn; Ailworth, Erin

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

U.S. energy companies are starting to cut drilling, lay off workers and slash spending in the face of an accelerating decline in oil prices, which fell to a fresh five-year low Wednesday.

The number of rigs drilling for oil in North Dakota and parts of Texas has started to edge down, new drilling permits have dropped sharply since October, and many companies say they are going to focus on their most profitable wells.

EOG Resources Inc. this week said it would shed many of its Canadian oil and gas fields, close its Calgary office and lay off employees there as it refocuses in the U.S. Matador Resources Co. of Dallas is contemplating temporarily leaving the prolific Eagle Ford Shale area in South Texas in favor of drilling elsewhere in Texas and New Mexico where it can make more money.

Investors sold off shares of energy companies including EOG as the U.S. benchmark oil price fell to $60.94 on Wednesday. EOG lost nearly 3% to $86.79 while shale specialists Continental Resources Inc. and Chesapeake Energy Corp. both declined about 7%. Many of these U.S. independent drillers have lost half their value since June.

Shares of global energy giants have fared better than the independent U.S. companies because their refining operations are benefiting from cheaper oil. But some of the biggest are disclosing cutbacks.

BP PLC, which has been cutting back since the Deepwater Horizon oil spill in 2010, outlined a further $1 billion restructuring on Wednesday. ConocoPhillips, one of the biggest shale producers in the U.S., recently said it would spend 20% less next year on drilling wells, honing in on its sweetest spots instead of drilling its more expensive areas like Colorado's Niobrara.

"At this point a contraction is unavoidable," said Karr Ingham, economist for the Texas Alliance of Energy Producers.

One reason for the stock declines is investors are skeptical: Whatever their plans, U.S. companies produced 9.1 million barrels a day last week, the highest level since 1983, according to federal data. There is so much oil sloshing around the U.S. that refiners can't use it all, so 1.5 million barrels of crude went into U.S. oil stockpiles last week.

Some companies will be able to keep pumping even at lower prices, depending on the location and quality of their wells. Enterprise Products Partners LP, which operates pipelines and oil storage terminals across the U.S., said its analysis shows that the average well in many shale formations aren't profitable at $60 oil. But wells considered high grade can withstand much lower prices. For instance, some wells in South Texas are profitable at prices of $30 a barrel, while the best in North Dakota's Bakken area can only withstand a drop to under $50 a barrel.

Energy companies' hedging strategies run the gamut from Continental Resources, which cancelled nearly all its price hedges and projected oil prices would soon rise, to Pioneer Natural Resources Co. of Irving, Texas, which has hedged 85% of its oil and gas output for 2015. Companies that hedged their production aren't as exposed to falling prices and may not have to pump less or curb spending as quickly.

Surging American oil output has helped create a global glut of oil that has sent prices spiraling downward. The benchmark U.S. oil price, which briefly rose above $107 a barrel in late June, closed below $61 a barrel Wednesday, down 43% since its summer high.

Drilling permits issued in the U.S. dropped 36% between October and November, according to data from Drillinginfo, but remain 13% above their year earlier level.

Another sign of the energy industry's pullback: the number of rigs drilling for oil in the Eagle Ford Shale in Texas has started to drop. Drilling in the nation's second most active oil region hit a peak of 210 rigs in July but recently fell to 190 rigs.

These declines don't necessarily mean that U.S. oil output will fall, said Greg Haas, a director at research firm Stratas Advisors in Houston, because companies are getting more efficient at drilling. "It used to be if the rig count dropped then oil production dropped, but not anymore," he said.

In a sense, energy companies are a victim of their own success. EOG, Chesapeake and others learned to drill and frack wells faster and wring more from each well. Chesapeake says its initial production at new wells in the Eagle Ford improved by 65% over the last five years.

Houston-based EOG took 22 days to drill a well in South Texas in 2011; today it takes less than nine days. The company recently said it can earn a 10% profit after taxes even if oil prices were to fall to $40 a barrel.

However, companies with a lot of debt, low rates of return and little chance of drilling their way to better profitability will be hurt if crude remains below $75 a barrel, according to analysts at Global Hunter Securities.

Among the companies they cited was Triangle Petroleum Corp. Jon Samuels, president of the Denver-based independent explorer, said his company is profitable at the current price of oil.

Triangle's shares are down 47% in the last two months. It is pushing vendors for cheaper prices for drilling equipment and contract labor in the new year, which should help bring down costs, he said.

"You're going to see activity levels and spending go down substantially compared to this year," Mr. Samuels said, adding that the stock market reaction to crude's price drop has been overblown.

Write to Lynn Cook at and Erin Ailworth at

Credit: By Lynn Cook and Erin Ailworth

Subject: Petroleum industry; Energy industry; Investments; Crude oil prices; Petroleum production

Location: United States--US Texas North Dakota

Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Enterprise Products Partners LP; NAICS: 486990, 211112; Name: Texas Alliance of Energy Producers; NAICS: 813910; Name: Chesapeake Energy Corp; NAICS: 211111; Name: Continental Resources Inc; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634884919

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634884919?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Asian Shares Rattled by Oil's Tumble; Shares Fall After Crude Plunges to Fresh Five-Year Low

Author: Deng, Chao

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]with GDP growth set to accelerate in the coming months, we think the next move in rates is more likely to be a hike than a cut, but probably not until the second half of next year," it said.

Links: 360 Link to Full Text

Full text:

Stocks fell across Asia Thursday, as a rippled through the region and pressured Chinese state-owned energy companies and major oil producers in Australia in particular.

The Hang Seng Index shed 0.9% to 23312.54, pulled down by a gauge of Chinese firms. The Hang Seng China Enterprises Index was down 1.0% to 11255.43.

Among energy stocks that suffered the largest declines, Kunlun Energy Co. Ltd., fell 3.5%, and Cnooc Ltd., was off 1.5%.

In Australia, the same sector was led lower by Santos Ltd., the country's third-largest oil company. The stock fell 8.8% after the firm next year and consider asset sales, as it tries to fortify its balance sheet against tumbling oil prices. Among Australia's large-cap oil companies, it has been the hardest hit by crude oil's plunge.

The broader S&P ASX benchmark fell 0.5% to 5231.00.

The losses stemmed from a 4.5% fall in benchmark U.S. crude overnight to $60.94 a barrel, and the biggest one-day drop since Nov. 28, the session that followed the Organization of the Petroleum Exporting Countries' . Prices were last at $61.10 a barrel.

In Hong Kong, the few gainers included Cathay Pacific Airways Ltd., whose stock was up 2.0%.

Korea's Kospi fell the most in the region, down 1.5% to 1916.59, after the Bank of Korea held steady on interest rates at 2.0%.

Capital Economics said that rising levels of household debt suggested further rate cuts are unlikely. "In fact, with GDP growth set to accelerate in the coming months, we think the next move in rates is more likely to be a hike than a cut, but probably not until the second half of next year," it said.

The Shanghai Composite Index fell 0.5% to 2925.75, although trading was less volatile than recent sessions. The index plunged 5.4% on Tuesday and jumped 2.9% Wednesday.

In Japan, a weaker dollar hurt the Nikkei Stock Average, which ended down 0.9% at 17257.40, marking a third straight losing session. As of the close of Tokyo trading, the greenback changed hands at Y118.16, more than one yen lower than the previous day.

The 6.4% fall in Japanese core machinery orders in October--the first in five months--wasn't cited by market participants as a trading factor, even though it bodes ill for a domestic economy struggling to recover its momentum after an April sales tax increase.

Gregor Stuart Hunter and Bradford Frischkorn contributed to this article

Write to Chao Deng at

Credit: By Chao Deng

Subject: Petroleum industry; Statistical data; Energy industry

Location: China Asia Australia

Company / organization: Name: Cathay Pacific Airways Ltd; NAICS: 481111; Name: Bank of Korea; NAICS: 521110; Name: CNOOC Ltd; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634891621

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634891621?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

The Peak of 'Peak Oil' Has Been Postponed Yet Again

Author: Anonymous

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: A.16.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

History will certainly repeat itself, again. The editorial "'Peak Oil' Debunked, Again" (Dec. 5) is spot on in predicting that fuel supply will always satisfy demand at a price, and that technology and entrepreneurship will be stimulated to add to supply the higher the price. But three other important historical patterns also will be repeated in oil markets.

Auto shoppers have a short-term perspective and will respond to lower gasoline prices today by bulking up, and the U.S. will lock in future demand for gasoline in the form of vehicles with an average life expectancy of 16 years. It is not surprising that 47% of last month's domestic auto sales were SUVs and light trucks -- the same demand response that occurred after oil prices collapsed in 1986.

Saudi Arabia, the world's lowest-cost producer, will never play a classic role and increase production as long as marginal output is profitable.

John Shages

Strategic Petroleum Consulting LLC

Washington

Mr. Shages was a deputy assistant secretary, petroleum reserves, at the Department of Energy 2003-07.

---

Standing atop the pyramid of finite-resource alarmists and exploiters are those who can convert insecurities about raw materials into raw political power.

John Finley

Hampton, Va.

---

Ronald Ferland

Bluffton, S.C.

---

Martin Jacobson

Lincoln, Calif.

Subject: Supply & demand; Petroleum industry; Energy policy; Gasoline prices

Location: United States--US

Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.16

Publication year: 2014

Publication date: Dec 11, 2014

Section: Letters to the Editor

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634925575

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634925575?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

For Gold Miners, Cheaper Oil Is Scant Solace --- Pressed by Falling Metal Prices to Cut Costs, They're Considering Spinoffs and the Sharing of Administrative Functions

Author: MacDonald, Alistair

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: B.8.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Among other things, miners are drawing up plans to spin off assets and share administrative functions between companies.

Analysts also point out a flip side to declining oil: It damps the inflation that boosts gold.

Another macroeconomic benefit has been the rising dollar, which lowers costs in countries where miners operate. Yamana Gold Inc. -- which mines in Canada, Brazil, Argentina and Chile -- says that for every 10% devaluation in these countries' currencies, its mining costs fall by $40 to $50 an ounce. Yamana's costs averaged $807 an ounce in the third quarter.

"The dollar and oil, it's a nice win," said Steve Letwin, chief executive of Iamgold Corp. "But you have to continue to make sustainable cost cuts, given how volatile gold and oil are."

Given this, miners are looking at other ways to cope with a lower gold price.

Some bankers say companies are increasingly discussing forming joint ventures to share costs -- such as power generation, geologists and regional offices -- for mines that operate near each other. But recent precedent isn't good. Barrick and Newmont looked at this in Nevada, but talks have so far gone nowhere.

Sharing operations without combining companies is difficult. "Each company is going to have its own interest at heart," said Patrick Chidley, a mining analyst at HSBC Securities.

Such savings might not be significant enough, say analysts. Instead, they say, investors want to see more aggressive moves, such as full-scale mergers and shutting down unprofitable mines.

The long-expected consolidation in gold has yet to materialize. While the values of gold miners have fallen, the expectations of their owners have not.

If gold prices fall further, consolidation will become inevitable, Mr. Ogilvie and others say.

---

Ben Dummett contributed to this article.

Credit: By Alistair MacDonald

Subject: Gold markets; Commodity prices; Capital expenditures; Cost control; Gold mines & mining

Company / organization: Name: Iamgold Corp; NAICS: 212221; Name: Yamana Gold Inc; NAICS: 212221; Name: Barrick Gold Corp; NAICS: 212221

Classification: 9180: International; 8500: Extractive industries

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.8

Publication year: 2014

Publication date: Dec 11, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634953421

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634953421?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Corporate News: How Cheaper Oil Helps U.S. Factories

Author: Aeppel, Timothy

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: B.2.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Cheaper oil is creating winners and losers among America's factories.

Manufacturers who use oil and products derived from it are saving big money. But energy development has been a hot spot in the postrecession U.S. economy, benefiting producers of everything from steel pipes and valves to earthmovers. Those companies are now being squeezed.

Among those feeling the pinch is Dover Corp., which earns a quarter of its revenue from selling pumps and other equipment to energy companies.

"Clearly there are near-term challenges in front of us," Chief Executive Bob Livingston told investors in New York on Monday. Dover said it hasn't yet seen a pullback in oil drilling, but the company is cutting costs and re-evaluating some investments in anticipation of reduced oil exploration in the U.S. next year. General Electric Co. in October cut projections for future growth in its oil-and-gas business, adding it was monitoring the sector with "caution."

Rockwell Automation Inc. also is weighing what cheaper oil means for its bottom line. The industrial-equipment maker counts on the oil and gas industry for about 12% of its sales.

"Everyone who uses oil as a feed stock -- from chemicals to consumer industries -- are going to benefit," said CEO Keith Nosbusch. That could mean more sales of Rockwell's industrial controls, motors and sensors to those industries. Meanwhile, oil drillers won't stop investments entirely, he said, and are likely to spend more on productivity-enhancing equipment.

How falling oil prices affect manufacturers will depend on how low crude goes and how long it stays there. Oil continued its slide Wednesday after the Organization of the Petroleum Exporting Countries cut forecasts for demand for its oil next year. The benchmark U.S. oil price fell to $60.94 a barrel, the lowest level since July 2009.

Still, the larger picture for manufacturers remains positive.

"I don't think it's a coincidence that we're getting sharp increases in [auto] sales at a time of sharp decreases in gas prices," said Mr. North.

The company reported its raw-material costs fell 6% year-over-year in the third quarter, though part of that reflects cheaper natural rubber. It takes time for lower oil prices to filter through to its suppliers, which is why Goodyear predicts its raw-material bill will keep falling through the first half of next year.

"But what really helps us," said Mr. Price, "is that as gas prices fall, people tend to drive more -- so their tires wear out faster."

Don Norman, director of economic studies at the MAPI Foundation, a manufacturing research group in Arlington, Va., agrees cheaper oil benefits most manufacturers. "Manufacturers benefit because of lower prices, including lower shipping costs. And consumers spending less on gas and heating oil means they'll be out shopping," he said.

The farther a business is removed from the production of oil, the more clear the benefits. At Northland Aluminum Products Inc. in Minneapolis, for instance, orders for its trademark bunt pans and other baking gear surged in late September and CEO David Dalquist credits falling oil prices.

Business is 15% above his projections last summer. "We see a one-to-one relation between discretionary income and the price of gasoline," he said. Northland eventually expects to see declines in raw-material prices.

---

Ted Mann contributed to this article.

Credit: By Timothy Aeppel

Subject: Petroleum industry; Capital expenditures; Manufacturing; Crude oil prices

Location: United States--US

Company / organization: Name: Rockwell Automation Inc; NAICS: 334419, 334513, 335314, 334111, 334112; Name: Dover Corp; NAICS: 334513, 332919, 333921, 333318, 333517; Name: Goodyear Tire & Rubber Co; NAICS: 326211, 326299

Classification: 8600: Manufacturing industries not elsewhere classified; 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.2

Publication year: 2014

Publication date: Dec 11, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634953529

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634953529?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Plunge Dims Outlook for LNG Projects; Companies Including Chevron and Shell Have Invested Nearly $250 Billion in LNG Projects

Author: Ross, Kelly

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

Unless prices recover, the decline could wipe out returns for companies such as Chevron Corp. and Royal Dutch Shell PLC, which have committed nearly $250 billion combined to liquefied-natural-gas projects over the past seven years to meet rising Asian demand for the cleaner-burning fuel.

Links: 360 Link to Full Text

Full text:

SYDNEY--Investors in giant gas-export terminals from Australia to Canada are facing the prospect of losing billions of dollars plowed into the projects as plunging oil prices darken the outlook for the industry.

LNG is natural gas compressed into liquid form inside huge refrigeration units, making it possible to ship it on tankers to places unconnected by pipelines.

To fund their plans, the companies have typically agreed to sell most of the gas up front, ahead of the completion of their projects, at rates linked to oil prices. The oil-linked pricing means LNG producers stand to get much less revenue when they deliver their first shipments than if crude had remained nearer its peak of $116 some six months ago. On Thursday, Brent crude, the global oil-price benchmark, was near $64 a barrel in European trading.

Already, the decline has claimed a casualty in Canada. Last week, developers led by Malaysia's Petroliam Nasional Bhd., or Petronas, indefinitely delayed starting construction of a $32 billion on the Pacific coast.

Crude futures have been weakening for months, but declines accelerated last month following a to maintain its production limits, despite concern over a glut of oil.

have sunk below $10 per million British thermal units, meaning many of the projects may struggle to turn a profit. "OPEC's come along and burst the bubble," said Mark Samter, a Sydney-based analyst at Credit Suisse. "Project returns are awful at these prices."

To break even, most Australian LNG projects would need to sell the commodity for at least $12-to-$14 per million British thermal units, according to estimates from Credit Suisse and Wood Mackenzie, a resource-industry consultancy. The price would need to be even higher for some of the more-expensive developments.

To be sure, most experts believe demand for LNG will soar over the coming decades as countries such as China attempt to drive their modernization using fuel that burns more cleanly than coal. Demand for LNG will also likely remain high in economies such as South Korea and Japan, which lack fossil-fuel reserves. Japan has been using more LNG since the 2011 prompted it to close its nuclear reactors.

Typically, spanning up to 30 years. A swift recovery in the oil price could allow projects to make money eventually, if their owners can withstand the financial pressure long enough. Santos Ltd., a big investor in Australian LNG, has been forced to cut spending across its business after the fall in oil prices prompted it to defer raising cash through a sale of so-called hybrid securities.

Even as companies struggle with lower prices, Australian LNG projects have suffered from cost overruns caused by everything from unfavorable currency swings to labor shortages. The challenges are different for producers in Middle Eastern countries such as Qatar, where labor costs are lower.

On the east coast of Australia, U.K. oil-and-gas company BG Group PLC is running last-minute checks before starting up a vast facility that cost more than $20 billion to build, having overcome budget overruns of more than a third of the original price tag. The project--clustered on an island with two giant plants owned by rivals including Santos, Total SA and ConocoPhillips--is due to ship its first LNG cargoes to Asia this month.

BG said it remained optimistic about the prospects for its Queensland Curtis LNG project, which counts China's Cnooc Ltd. as a minority investor and a key customer. "The economics for QCLNG are sound and competitive across a wide range of oil prices," a BBG spokesman said.

The company bolstered its balance sheet this week by selling the project's main pipeline to Australia's APA Group Ltd. for $5 billion.

On the country's west coast, the cost of building the Gorgon LNG project, operated by Chevron with backing from Shell and Exxon Mobil Corp., has already swelled by around 45% to $54 billion since building started in 2009. The work is expected to be completed sometime next year, when the project is also supposed to come online. A spokesman for Chevron declined to comment on the weakening oil price, but Chief Financial Officer Pat Yarrington said in October that four major projects it is building, including Gorgon, would rapidly turn from being "cash consumers" to "cash generators."

"Clearly, many Australian projects are at risk of delivering inadequate returns," said Ian Ashcroft, a U.K.-based gas analyst at Wood Mackenzie. "Some are already suffering due to cost overruns, but the impact of the oil price on early cash flow is also critical to project economics."

Elsewhere, companies that haven't started building dozens more planned LNG terminals in Canada and East African countries such as Tanzania and Mozambique will likely be questioning the timing of hundreds of billions of dollars in proposed new investments.

U.S. shale-gas producers looking to export their product are affected less by the drop in oil prices because they typically signed contracts overseas linked to U.S. domestic-gas prices, which are low due to the boom in the local production of shale gas. But on the flip side, thanks to crude oil's fall, LNG producers offering oil-linked contracts will be able to compete better in the international market against their U.S. rivals.

Currently, two LNG terminals are under construction in the U.S. Several more have received the go-ahead from regulators. Construction of the Sabine Pass project in Louisiana, operated by Houston-based Cheniere Energy Inc., began two years ago and is expected to be completed late next year. Freeport LNG Development LP last month began a project in Texas; it expects to begin shipping gas in 2018.

Both projects involve converting LNG import terminals into export facilities. They are expected to be less expensive than the Australian ones because pipelines and storage tanks are already in place. Cheniere declined to comment, while a spokeswoman for Freeport said it had signed contracts that would absorb its plant's projected output for decades.

Daniel Gilbert in Houston and Mari Iwata in Tokyo contributed to this article.

Write to Ross Kelly at

Credit: By Ross Kelly

Subject: LNG; Petroleum industry; Prices; Natural gas

Location: Canada Australia

Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Petronas; NAICS: 211111; Name: Credit Suisse Group; NAICS: 522110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634955091

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634955091?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Tumbling Crude Price Knocks Oil Stocks, Currencies Lower; Investors Also Fretting About Slowing Global Growth

Author: Cox, Josie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

Eurozone finance ministers agreed to extend Greece's bailout by two months on Monday, giving Athens and its international creditors extra time to decide on new budget cuts, and pushing a decision on further support beyond presidential elections.

Links: 360 Link to Full Text

Full text:

Oil-related stocks and currencies continue to suffer steep declines after , turning up the heat on major oil-exporting economies, two of which made monetary-policy announcements Thursday.

Brent crude oil slumped to $63.70 a barrel while West Texas Intermediate hit $60.09, both levels not seen since July 2009. Even though prices recovered somewhat later in the day, the sting remained palpable.

Russia's ruble hit an all-time low against the dollar of 55.73 rubles mid afternoon, compared with just over 32 at the start of the year, even after the Bank of Russia raised its by one percentage point to 10.5%.

Even though an interest rate rise would typically strengthen a currency, some economists said that this was a relatively moderate move.

"This was the minimum that the CBR was likely to do," said Tim Ash, head of emerging market research for Standard Bank. "I guess this shows that the CBR is loath to do anything radical, and is like a rabbit caught in the headlights."

The Norwegian krone, meanwhile, against the euro after the central bank cut its key interest rate to 1.25% from 1.5% to combat slowing domestic growth and the falling price of oil.

The krone lost almost 1.5% against the euro after the announcement, to trade just over 9 kroner against the single currency. Oslo's main stock index was down around 0.3% by midafternoon.

The krone has depreciated around 7.4% against the euro since the start of the year. Norges Bank was broadly expected to keep rates on hold. Its last cut was in March 2012.

Norway is Europe's biggest crude exporter and Norges Bank said in a statement Thursday that "activity in the petroleum industry is set to be weaker than projected earlier."

Elsewhere Thursday, European shares dropped for a fourth consecutive day as fears of slowing global economic growth continued to permeate markets, while uncertainty over Greece's political future also lingered.

Some equities indexes recovered later in the day--the Stoxx Europe 600 closed broadly flat--but London's FTSE 100, with substantial exposure to the oil and gas sector, remained under fire, falling 0.7% on the day.

Athens's main stock index was the biggest underperformer, though, slumping an additional 7.4% on lasting political jitters. The yield on the country's 10-year government bond hovered close to 9.0%, about 0.45 percentage point wider on the day.

Earlier in the week, the announced that Parliament would vote on a new president on Dec. 17--two months ahead of schedule--to replace Karolos Papoulias, whose five-year term was slated to end in March.

that Greece's radical left opposition Syriza party could win national elections if presidential voting rounds fail to find a solution acceptable to all.

The latest opinion polls suggest that Syriza--which has threatened to tear up the economic overhaul and austerity program that has accompanied the country's international bailout--would win national elections by about three to six percentages points, and could precipitate a new crisis with Greece's creditors.

That market volatility sparked a renewed appetite for assets considered to be safest at times of stress. The yield on Germany's 10-year government bond declined to a fresh all-time low of 0.656%. Yields fall as bond prices rise.

In the U.S., the S&P 500 rose strongly, having tumbled in the previous session, fueled by figures showing that November sales at U.S. retailers grew at their fastest pace in eight months. Separate data showed a drop in weekly jobless claims.

The European Central Bank said on Thursday it ($161.6 billion) in four-year loans to banks in the second installment of a lending program aimed at raising the ECB's balance sheet and spurring new credit to the private sector.

Demand was greater than the nearly [euro]83 billion provided at the previous offer of four-year loans in mid-September, but was below the roughly [euro]150 billion takeup expected by economists.

As a result, the outcome could heap further pressure on the ECB to expand its broad-based asset-purchase program early in the new year to include sovereign bonds.

The euro was trading around 0.7% lower against the dollar in late European trade, at $1.240. Gold was 0.1% lower on the day at $1,228.50 a troy ounce.

Todd Buell contributed to this article

Write to Josie Cox at

Credit: By Josie Cox

Subject: Interest rates; Bailouts; Currency; Statistical data

Location: Russia Greece

People: Papoulias, Karolos

Company / organization: Name: Norges Bank; NAICS: 521110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634968982

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634968982?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Wary Investors Sell Stocks As Oil Prices Keep Falling

Author: Friedman, Nicole; Strumpf, Dan; Said, Summer

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: A.1.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

The steady gains in stocks amid mostly uneven U.S. growth has made some portfolio managers nervous that at least a temporary reversal could be in the offing.

The Dow Jones Industrial Average slumped to its biggest one-day point and percentage decline since Oct. 9, dropping 268.05 points, or 1.5%, to 17533.15.

The S&P 500 index fell 33.68 points, or 1.6%, to 2026.14.

Hardest hit were shares of U.S. energy producers, whose fortunes are closely tied to the price of oil.

Shares of materials, industrials and technology companies also tumbled. All 10 major market sectors declined.

The dollar, usually considered a safe haven, has fallen against the yen and the euro since Friday, including a 1.6% drop against the Japanese currency on Wednesday.

Investors appear to be taking advantage of periods of uncertainty to take profits on dollar bets that have appreciated substantially this year.

A number of big banks, including Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley, have lowered their forecasts in recent months as prices have fallen well below expectations.

"What I'm looking at is a market that has no reason yet to bounce," said Jan Stuart, global energy economist at Credit Suisse. "There's no indication that [the market is] getting any less weak."

Mr. Stuart said he believes oil prices will bottom out in the first quarter. After that, he expects reduced investment will lead to slower production growth at the same time demand strengthens.

---

James Ramage contributed to this article.

Credit: By Nicole Friedman, Dan Strumpf and Summer Said

Subject: Petroleum industry; Investors; Dow Jones averages; Global economy; Crude oil prices; Securities markets

Location: United States--US

Classification: 3400: Investment analysis & personal finance; 9190: United States; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.1

Publication year: 2014

Publication date: Dec 11, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634969093

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634969093?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Stocks Slide Broadly as Crude-Oil Price Falls --- Hardest Hit Are Energy Producers, but All 10 Major Sectors Decline; Despite Pullback, Dow Isn't Far From Record Close

Author: Strumpf, Dan; Vaishampayan, Saumya

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: C.4.

ProQuest document link

Abstract:

Energy companies in the S&P 600 index of small-capitalization companies fell 4.3%. Since midyear, more than half the value of companies in the index has been wiped out.

Links: 360 Link to Full Text

Full text:

Stocks tumbled after a renewed downturn in oil prices rattled investors and led to sharp declines in already battered energy stocks.

The Dow Jones Industrial Average dropped 268.05 points, or 1.5%, to 17533.15, its biggest one-day decline in two months and the third consecutive decline for the blue chips. The S&P 500 index sank 33.68 points, or 1.6%, to 2026.14. The Nasdaq Composite Index shed 82.44, or 1.7%, to 4684.03.

The declines were marketwide. Hardest-hit were shares of U.S. energy producers, whose fortunes are closely tied to the price of oil. But shares of materials, industrials and technology companies were also down sharply. All 10 major market sectors were lower.

Traders and investors attributed the slide to the latest downturn in the price of crude, spurred by an unexpected jump in domestic oil stockpiles that underscored the scale of the U.S. oil glut. Benchmark U.S. crude tumbled 4.5% to $60.94 a barrel on the New York Mercantile Exchange, the lowest since July 2009.

However, several traders said selling was orderly and volumes weren't unusually heavy given the size of the day's move. Amplifying the slide, they said, was end-of-year jockeying by some investors selling losing bets as a way to reduce tax bills, pressuring already-hit corners of the market -- in this case, energy stocks.

"Energy and crude is what's driving the boat," said Bill Nichols, head of U.S. equities at Cantor Fitzgerald. "You get this sort of 'sell everything' mentality."

The pullback in stocks this week comes after seven weeks in a row of gains for the Dow and S&P, and despite Wednesday's slide, major indexes remain close to recent record highs. The Dow is just 2.4% off its record hit on Friday and is up 5.8% year to date. The S&P is up 9.6% this year.

Other markets also saw large moves. The yield on the 10-year Treasury note fell to a nearly two-month low of 2.169%, as investors fled to the haven of government bonds. The dollar fell 1.6% against the yen, in the largest one-day move since June 2013.

Much of the day's focus, however, surrounded the slide in energy stocks. Among Dow components, Chevron shares fell $2.15, or 2%, to $104.86, and Exxon Mobil lost 2.71, or 3%, to 88.67.

Harder hit were shares of small oil-and-gas producers, many of which face heavy debt loads that are coming under investor scrutiny amid lower oil prices. Energy companies in the S&P 600 index of small-capitalization companies fell 4.3%. Since midyear, more than half the value of companies in the index has been wiped out.

More broadly, exploration-and-production companies, whose revenues are closely tied to the price of oil, fell sharply. The SPDR S&P Oil & Gas Exploration & Production exchange traded fund fell 4.8%.

Many investors have said the drop in oil prices should benefit stocks in the long run, as falling gasoline prices boost consumer spending. While a decline in oil prices is a drag on earnings of energy companies, it could benefit earnings in the industrial and retail sectors, said Paul Atkinson, who oversees $3 billion as head of North American equities at Aberdeen Asset Management.

"Overall . . . the benefits of lower oil prices will come through, and that will offset the problems at energy companies," he said.

In overseas action, Greek stocks continued to fall amid political uncertainty in the country. Earlier this week, the Greek government sped up the timeline for a key vote in Parliament. The Athex, which had closed Tuesday almost 13% lower, fell as much as 4% at one point, but recovered to end 1% lower on the day.

The Stoxx Europe 600 declined 0.3%.

Stock-market action was mixed in Asia. China's Shanghai Composite Index rose 2.9%, while Japan's Nikkei Stock Average fell 2.2%.

Gold futures fell 0.2% to $1,228.90 an ounce.

Credit: By Dan Strumpf and Saumya Vaishampayan

Subject: Stock prices; Dow Jones averages; Daily markets (wsj)

Classification: 3400: Investment analysis & personal finance; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.4

Publication year: 2014

Publication date: Dec 11, 2014

column: Wednesday's Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634969151

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634969151?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Drop Puts Chill on U.S. Energy Drilling --- Accelerating Price Decline Is Forcing Some to Cut Workers, Flee Pricey Regions

Author: Cook, Lynn; Ailworth, Erin

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: B.1.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

U.S. energy companies are starting to cut drilling, lay off workers and slash spending in the face of an accelerating decline in oil prices, which fell to a fresh five-year low Wednesday.

"At this point a contraction is unavoidable," said Karr Ingham, economist for the Texas Alliance of Energy Producers.

Drilling permits issued in the U.S. dropped 36% between October and November, according to data from Drillinginfo, but remain 13% above their year earlier level.

Houston-based EOG took 22 days to drill a well in South Texas in 2011; today it takes less than nine days. The company recently said it can make a 10% profit after taxes even if prices were to fall to $40 a barrel.

Among the companies it cited was Triangle Petroleum Corp. Jon Samuels, president of the Denver-based independent explorer, said his firm is profitable at the current price of oil.

Triangle's shares are down 47% in the last two months. It is pushing vendors for cheaper prices for drilling equipment and contract labor in the new year, which should help bring down costs, he said.

"You're going to see activity levels and spending go down substantially compared to this year," Mr. Samuels said, adding that the stock market reaction to crude's price drop has been overblown.

Credit: By Lynn Cook and Erin Ailworth

Subject: Petroleum industry; Investments; Hydraulic fracturing; Crude oil prices; Petroleum production

Location: Texas North Dakota

Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: BP PLC; NAICS: 447110, 324110, 211111

Classification: 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.1

Publication year: 2014

Publication date: Dec 11, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634969189

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634969189?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

U.S. Oil Prices Drop Below $60; Prices Have Plunged About 40% in Nearly Six Months

Author: Hong, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

"The initial assessment of both OPEC and the EIA is that falling oil prices are not expected to increase global oil demand nor to significantly cut non-OPEC supply," said analysts at brokerage PVM in a note.

Links: 360 Link to Full Text

Full text:

The benchmark U.S. oil price dropped below $60 a barrel for the first time in more-than five years, extending a losing streak as investors and traders brace for a global supply glut to worsen through next year.

Oil futures settled 1.6%, or 99 cents, lower at a $59.95 a barrel on the New York Mercantile Exchange, a price not seen since July 2009 during a world-wide recession. Brent crude, a gauge of global prices, fell 0.9%, or 56 cents, to $63.68 a barrel on ICE Futures Europe.

Oil prices have plunged about 40% in nearly six months due to rising production in the U.S. and elsewhere. Selling accelerated late last month after the Organization of the Petroleum Exporting Countries opted to .

"Everything that's been weighing on oil continues to weigh on it, and there's been no relief," said John Kilduff, founding partner of Again Capital. "It's just a complete rout."

On Thursday, prices rebounded briefly into positive territory following the release of before falling again on the heels of a stronger dollar. Oil is priced in dollars and becomes more expensive for investors in other countries when the dollar strengthens, dampening their interest in the market. The dollar on Thursday against the Russian ruble, Brazilian real, Mexican peso and South African rand.

Investors viewed $60 a barrel as a key psychological level for oil prices because it was a round number where traders had built up a significant position. Now that traders have pushed through that level, analysts say the next target for oil prices is $58 a barrel in the short term.

The selloff on Thursday followed a sharp fall in oil prices on Wednesday, after U.S. data showed an unexpected increase in U.S. oil supplies last week as the nation's production rose to its highest level in decades. Wednesday's fall in oil prices, which has pummeled energy stocks in recent weeks, dragged down the broader stock market.

On Thursday, major U.S. of the day. Traders attributed the decline late in the day to the fall in crude oil.

Still, dropping oil prices have been a boon to the U.S. economy, as drivers are spending substantially less on gasoline in the midst of the holiday-shopping season. Data on Thursday showed U.S. retail sales in November logged their biggest gain in eight months, thanks to lower gasoline prices.

But lower prices hurt oil-producing nations and companies that drill for oil and threaten the viability of expensive drilling projects, especially in U.S. shale-oil fields.

"If you're an oil bull, you really have nothing to hang your hat on for more than a few blips here and there," said Kyle Cooper, managing director of research at consulting firm IAF Advisors. "I don't think prices are done going down yet."

Both the U.S. Energy Information Administration and OPEC lowered their demand forecasts for 2015 in reports released this week. The International Energy Agency is due to release its own forecast Friday.

January reformulated gasoline blendstock, or RBOB, fell 1.1%, or 1.74 cents, to $1.6244 a gallon.

January diesel gained 0.7%, or 1.5 cents, to $2.0614 a gallon.

Nicole Friedman contributed to this article.

Write to Nicole Hong at

Credit: By Nicole Hong

Subject: Petroleum industry; Investments; Crude oil prices; Gasoline prices

Location: United States--US

Company / organization: Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634983120

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634983120?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Bangladesh Labors to Clean Up Oil Spill That Threatens the Sundarbans; Experts Say Country Lacks Resources to Clean Up the Slick

Author: Syed Zain Al-Mahmood

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

On Thursday, officials at the Ministry of Environment and Forests said an oil tanker that sank two days ago in a river in the Sundarbans with about 350,000 liters (92,000 gallons) of furnace oil on board had been raised and towed to the river bank, stopping further spillage.

Links: 360 Link to Full Text

Full text:

DHAKA--Bangladesh is struggling to clean up an oil spill that threatens environmental damage in the Sundarbans, the world's largest mangrove forest and home to rare Bengal tigers and river dolphins.

Abdullah Al Islam, the deputy environment minister, said the government had closed the river route through the Sundarbans and mounted a cleanup operation involving navy personnel, forest guards and local volunteers.

"We're doing everything we can to limit the damage to the Sundarbans," he said.

Muhammad Giasuddin, managing director of Harun & Co., the tanker's owner, said the ship sank after being rammed by another vessel, which he didn't identify, in thick fog. He said his vessel wasn't to blame for the accident.

There is no official data on how much oil has spilled. Forest guards, environmentalists and local residents said Thursday the oil had spread into smaller channels inside the forest, a complex mosaic of waterways, mud flats and small islands. Villagers described on local television an overpowering stench of oil and claimed that ducks were dying after swimming in the slick. Local environmentalists estimated that the slick had spread over an area measuring roughly 50 to 70 square kilometers.

The Sundarbans, an area that stretches across the Ganges, Brahmaputra and Meghna river deltas near the Bay of Bengal, is home to rare animals like the Bengal tiger and other threatened species such as the river dolphins and Indian pythons. It was declared a Unesco world heritage site by the United Nations in 1997 and is visited by thousands of tourists annually. Biologists say the mangrove forest is the only place in the world where the freshwater Ganges dolphins and Irrawaddy dolphins are found.

Experts say Bangladesh lacks the resources to clean up the oil slick, which has been washing up since Tuesday when the tanker, Southern Star-7, sank in the Shyala river, close to a sanctuary for endangered freshwater dolphins.

In a statement, Pauline Tamesis, country director of the United Nations Development Program in Dhaka, expressed concern about the spill and called for efforts to prevent long-term environmental damage. The accident, Ms. Tamesis said, showed "the need for a complete ban on the movement of all commercial vessels through the Sundarbans."

Dilip Kumar Dutta, a professor of environmental science at Khulna University, said the oil would reduce the amount of oxygen in the water and make it difficult for aquatic species to breathe. "The oil is spreading in the mud flats and removing it will need specialist expertise," he said.

Officials of the environment ministry said a ship carrying dispersants--chemicals that help remove oil from the water surface by breaking oil slicks into smaller droplets--was heading to the area and would start work Thursday afternoon.

Environmentalists have criticized the government for not reacting sooner to the spill and for allowing commercial shipping to pass through a wildlife sanctuary. "It is completely unacceptable for tankers to be passing through an area with a delicate ecosystem like the Sundarbans," said Syeda Rizwana Hasan, chief executive of the Bangladesh Environmental Lawyers' Association. "This was a disaster waiting to happen."

Commercial boats were banned from passing through the Sundarbans in the late 1990s. The government in 2011 allowed a route to be opened through the forest after a regular river route that bypasses the Sundarbans was closed due to heavy silting. The government says it is dredging the river to fix the problem.

Write to Syed Zain Al-Mahmood at

Credit: By Syed Zain Al-Mahmood

Subject: Oil spills; Endangered & extinct species; Environmental protection; River ecology; Environmental cleanup

Location: Bangladesh Bay of Bengal

Company / organization: Name: United Nations--UN; NAICS: 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634994904

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634994904?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Oil Slide Drives Central Banks to Action; Oil Dropped to a Fresh Five-Year Low of $63.90 a Barrel

Author: Cox, Josie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

The weak price of oil is increasingly spilling over into other financial markets, battering stocks and currencies of oil-dependent economies and driving central banks to action.

The central banks of Russia and Norway each responded to continuing low oil prices Thursday to try to stem the selloff in their currencies. In the Persian Gulf, stock markets saw sharp declines.

The price of Brent crude, which has tumbled 41% so far this year, dropped to a fresh five-year low of below $63.90 a barrel, while West Texas Intermediate hit $60.09--a level not since mid 2009.

"Prices are forecast to remain pressured for at least two more quarters," said Barclays oil market economist Miswin Mahesh. He predicts that crude could slip below $60 a barrel in the near term--a level which he says is simply not sustainable for markets in the long run.

Russia's central bank on Thursday to 10.5% from 9.5%, and its deposit rate to 9.5% from 8.5%, in an attempt to halt a slide in the ruble.

The currency was battered earlier this year by geopolitical tensions and resulting sanctions, but its decline has been exacerbated in recent months by the oil shock, especially after the 12-member Organization of the Petroleum Exporting Countries last month to cut their output. Around 50% of Russia's annual budget revenue stems from oil and gas exports.

Elsewhere in Europe, the Norwegian krone fell to a five-year low against the euro after the central bank to 1.25% from 1.5% to combat slowing domestic growth, specifically citing the tanking price of oil.

The krone lost almost 1.5% against the single currency after the announcement, to trade just over nine kroner per euro.

It has depreciated around 7.4% against the euro since the start of the year. Norges Bank had broadly been expected to keep rates on hold; it last cut rates in March 2012.

Norway is Europe's biggest crude exporter, and Norges Bank said in a statement Thursday that "activity in the petroleum industry is set to be weaker than projected earlier."

"The continuing collapse in oil prices now hangs like a bad smell over markets," said Anthony Peters, a strategist at London-based financial adviser SwissInvest, adding that it "creates all kinds of conundrums in the foreign-exchange market" too.

Tim Ash, head of emerging market research for Standard Bank said that Russia was now "a rabbit caught in the headlights."

The central bank doesn't want to "waste" reserves by propping up the ruble, "and doesn't really want to raise policy rates for fear of pushing the economy deeper into recession."

So as long as oil stays low and sanctions remain, the ruble will continue to feel the strain, he said.

Société Générale strategists said that they now suggest investors buy the Turkish lira against the ruble. Turkey is a big energy importer, to the tune of some $55 billion a year, or 6.5% of gross domestic product, according to Standard Bank. Falling oil should deliver benefits for both the country's current account and for inflation. The lira has risen around 4.7% against the euro so far in 2014.

Further afield, stock markets in the Persian Gulf also plunged Thursday, with traders similarly pointing to oil. Dubai's market was down more than 7%. The main index in Abu Dhabi dropped 4.7%, Qatar slid 4.3% and Oman was down 4.2%. Saudi Arabia, the largest index in the region, fell 0.2%.

In Europe, the Stoxx Europe 600 closed broadly flat on the day but the subindex of oil and gas companies ended down 0.4%, taking its slide so far this year to nearly 18%.

London's FTSE 100 index, a large proportion of which is exposed to the oil and gas sector, fell around 0.7% to take losses so for in December to over 4%.

According to several London-based traders, the recent tumble also inspired the central bank of Nigeria to intervene yet again late Wednesday, selling U.S. dollars to prop up the naira.

Nigeria's central bank has taken action a number of times in recent weeks. Early last week, the naira slumped to 186.9 versus the U.S. dollar to an all-time low. On Thursday it was just below 180, according to Thomson Reuters data.

Oil and natural gas make up almost all of Nigeria's exports and 80% of government revenue, according to the International Monetary Fund. Last week Nigeria's finance ministry proposed a lower benchmark for the budgeted oil price, suggesting spending cuts.

A ministry spokesman said that Africa's biggest crude producer is now budgeting for an oil price of $65 a barrel, compared with the previous estimate of $73.

"The country lacks a large fiscal buffer, which would allow it to maintain spending or run countercyclical policies," said Hedi Ben-Mlouka, an fund manager at Dubai-based Duet, which looks after around $5.5 billion of equity. As well as Nigeria, Kazakhstan would likely be hit particularly hard too, he said.

On Wednesday, a report by Business Monitor International, a research unit of Fitch Ratings, said that the oil tumble had materially increased the risk of sovereign default in emerging markets, singling out Venezuela and Nigeria as particularly vulnerable.

"A handful of net oil exporters are rushing headlong into the danger zone," the report states.

Chiara Albanese contributed to this article

Write to Josie Cox at

Credit: By Josie Cox

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1634994919

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634994919?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

U.S. Import Prices Down 1.5% in November; Falling Oil Prices, Slow Growth Abroad and a Strong Dollar Hold Down Inflation

Author: Sparshott, Jeffrey

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

Goldman Sachs economists this week said lower fuel prices will by $100 billion to $125 billion nationwide, boosting consumer spending on other goods and services, and adding 0.4 to 0.5 percentage point to the pace of economic growth over the coming year.

Links: 360 Link to Full Text

Full text:

WASHINGTON--Prices of imported goods posted their biggest drop in nearly 2½ years in November, more evidence that falling oil prices, slow growth abroad and a strong dollar are holding down inflation in the U.S.

Import prices fell 1.5% from October, the said Thursday. Compared to one year earlier, prices were down 2.3%, the biggest year-over year drop since the spring of 2013.

The cost of overseas goods has been falling since July alongside a steady decline in oil prices. . Prices are down more than 40% since June.

But the price of other goods also is falling, potentially pushing key inflation gauges lower and complicating the Federal Reserve's plans to raise interest rates as the labor market improves and the overall economy shows signs of steadier growth.

Thursday's report said petroleum import prices fell 6.9% in November from the previous month and were down 12.3% on the year. Excluding petroleum, import prices declined 0.3% from the previous month and are up only 0.1% from a year earlier.

"The stronger dollar will likely continue to depress import prices and domestic consumer goods prices in the months ahead," Laura Rosner, economist at BNP Paribas, said in a note to clients.

Cheaper oil should prove to be a net gain for the U.S. economy, lowering the cost of gasoline and allowing consumers to spend more elsewhere. Indeed, .

Meanwhile, the stronger dollar, which in part reflects the relatively robust performance of the U.S. economy compared to Europe, Japan and some emerging markets, makes foreign goods less expensive for American importers. The dollar is up almost 10% against the euro and more than 13% against the yen so far this year.

Taken together, oil and the dollar are putting downward pressure on inflation, giving the Fed room to leave interest rates near zero, where they have held since December 2008.

The picture could become more complicated if the labor market continues to improve but inflation remains well below the central bank's 2% target into next year. In October, the price index for personal consumption expenditures, the Fed's preferred inflation gauge, was up only 1.4% from a year earlier. Core prices, which exclude volatile food and energy, edged up to 1.6%.

Economists at HSBC said core readings could fall a few tenths of a percentage point lower by the spring if global demand weakness and dollar appreciation continue.

"Policy makers at the Fed can look past a rise or decline in inflation caused by swings in energy prices," HSBC said. "But changes in the trend for core inflation are more concerning."

When inflation runs too low, central banks have less leverage to boost the economy if it starts to slow. Outright deflation generally signals a poor economic performance.

The Fed's next meeting is set for Dec. 16-17. Most economists don't expect officials to start to raise interest rates until some time next year.

Write to Jeffrey Sparshott at and Josh Mitchell at

Credit: By Jeffrey Sparshott

Subject: Prices; Economic models

Location: United States--US

Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: European Union; NAICS: 926110, 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Economy

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635012200

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635012200?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

U.S. Stocks Rise on Robust Retail Sales; Oil Prices Extend Decline After Wednesday's Tumble

Author: Driebusch, Corrie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

"In essence a decline in prices at the pump represents an increase in consumers' discretionary take-home pay, and it shouldn't be surprising that you should start seeing stronger retail sales," said Burns McKinney, portfolio manager at NFJ Investment Group, which manages about $41 billion.

Links: 360 Link to Full Text

Full text:

U.S. stocks rose Thursday with help from stronger-than-expected data on consumer spending, but fell back from their best levels as oil prices slumped.

The Dow Jones Industrial Average climbed 63.19 points, or 0.36%, to end at 17596.34. During the session, the blue-chip index had risen as many as 225 points.

The S&P 500 added 9.19 points, or 0.45%, to 2035.33 and the Nasdaq Composite rose 24.14 points, or 0.52%, to 4708.16.

After posting strong gains early in the session, stocks pared their advance in the afternoon as the for the first time since July 2009. The benchmark U.S. oil price settled at $59.95 a barrel.

Stocks were buoyed by data showing from a month earlier. Economists surveyed by The Wall Street Journal had expected overall sales to rise 0.4%. A decline in the number of Americans filing for first-time jobless benefits last week also cheered investors, who said they viewed the decrease as a sign that the labor market continues to improve.

Traders said that after recent sharp declines in equities, investors were ready to step in and buy shares of heavily downtrodden companies. In recent sessions stocks have had difficulty sustaining big moves upward or downward.

"Stocks have been choppy," said Quincy Krosby, market strategist at Prudential Financial. "Either the market today is leading us into the second half of December, which typically is a strong period for stocks, or we may have a little more consolidation to go before we get the Santa Claus rally."

Thursday's gains marked a reversal from the previous session's selloff that saw the Dow industrials post their biggest one-day loss in two months, as oil prices tumbled to five-year lows. The decline in oil prices leaves American consumers with more money in their pockets, potentially providing a boost to the U.S. economy, which already has seen robust job growth this year.

However, falling crude prices cut into the profit of energy companies, particularly those whose revenues rely heavily on U.S. shale oil, and this has led to steep declines in energy shares. The benchmark U.S. oil price is down more than 9% so far this week and the S&P 500 is off 1.9%.

Consumer discretionary shares rallied Thursday on the positive retail sales data, with the sector up 0.7%.

The market was "influenced by stronger-than-expected retail sales and lower-than-expected jobless claims," said Kent Engelke, chief economic strategist of Capitol Securities Management Inc., which manages just under $5 billion. The data supported the view that the U.S. economy is improving and came as stocks were ready to rebound after getting "beaten up" the day before, he said.

Investors noted that the positive economic figures released Thursday likely benefited from the lower cost of oil, and the benefits should continue to reverberate through the U.S. economy.

"Where you should see it the most is Wal-Mart or Costco where sales are competing for the incremental or marginal dollar to a greater degree than some of the luxury retailers."

Shares of Wal-Mart Stores Inc. rose 1.02% and those of Costco Wholesale Corp. gained 0.8%.

European stocks were unchanged, with the Stoxx Europe 600 down a fraction of a point.

The yield on the 10-year Treasury note rose to 2.178% from 2.169% on Wednesday. Yields rise as prices fall.

The U.S. dollar strengthened, rising against the yen and the euro.

In corporate news, shares of Staples Inc. jumped nearly 9% after Starboard Value LP disclosed in filings that it has in the company. The activist investor also boosted its position in Office Depot Inc. to about 10%. Shares of Office Depot rose 12%.

RadioShack Corp. on Thursday outlined a $400 million cost-cutting plan it hopes will stanch a hemorrhage of cash, as the struggling electronics chain tries to get through the holiday season in good enough shape to trigger a rescue plan from its lenders. Shares fell 7.3%.

Shares of Lending Club Corp. opened at $24.75 in their , well above their initial public offering price of $15, and valuing the company at nearly $9 billion. Shares closed up 56%.

Write to Corrie Driebusch at

Credit: By Corrie Driebusch

Subject: Petroleum industry; Stocks; Crude oil prices

Location: United States--US

Company / organization: Name: Prudential Financial Inc; NAICS: 551112; Name: Costco Wholesale Corp; NAICS: 452910; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635012234

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635012234?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Cenovus Cuts Capital Budget, Cash Flow View; Canadian Oil Producer Plans to Maintain Current Dividend Level

Author: McKinnon, Judy; George-Cosh, David

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

Canadian oil producer Cenovus Energy Inc. on Thursday lowered its 2015 capital-spending budget by about 15% and said it expects a 29% drop in cash flow due to slumping oil prices, but plans to maintain its current dividend level.

Links: 360 Link to Full Text

Full text:

The Calgary, Alberta company joins a host of other major energy firms paring back spending as oil prices remain weak.

Last week, oil-sands giant Canadian Oil Sands Ltd. next year, while smaller oil and gas producers Baytex Energy Corp. and Trilogy Energy Corp. both cut capital spending and either slashed or suspended dividends.

The scale back comes as crude prices hit new, five-year lows on Wednesday amid fresh signs of oversupply and as OPEC forecast lower demand for its oil next year.

Cenovus said it plans to focus its spending next year on producing assets and completing expansions of oil-sands projects which are already well under way, but "at a slow pace that conserves cash," Chief Executive Brian Ferguson said on a conference call.

"We continue to see continued volatility in oil prices throughout 2015 and we intend to exercise capital discipline in order to live within our means," Mr. Ferguson said.

The company plans 2015 spending of between 2.5 billion Canadian dollars ($2.18 billion) and C$2.7 billion, down from 2014 guidance of between C$3.0 billion and C$3.1 billion.

Cenovus said it would evaluate capital spending in the first quarter of next year and may adjust its budget if oil prices remain volatile. However, Mr. Ferguson said Cenovus has enough "capital flexibility" should oil prices remain low.

Cash flow is expected to decline to between C$2.6 billion and C$2.9 billion from 2014 guidance of C$3.8 billion to C$3.9 billion. Production, however, is expected to increase about 9% for oil sands and by about 4% overall to average between 197,000 and 214,000 barrels a day.

Oil prices at $65 a barrel of West Texas Intermediate will be able to cover the company's C$2.1 billion in committed capital in 2015 with existing cash flow, Mr. Ferguson said.

With oil prices falling 40% since October, Cenovus moved to spread its investment in some of its oil-sands projects over a longer period to preserve cash. The company expects first production from its Foster Creek oil-sands project to be pushed out by one or two quarters.

Mr. Ferguson added that Cenovus is committed to increasing its dividend "over time as the company is prepared to grow." It currently pays a quarterly dividend of 26.62 Canadian cents per share.

Write to Judy McKinnon at and David George-Cosh at

Credit: By Judy McKinnon and David George-Cosh

Subject: Petroleum industry; Cash flow; Capital expenditures; Dividends; Crude oil prices

Location: Calgary Alberta Canada

Company / organization: Name: Baytex Energy Corp; NAICS: 324110; Name: Canadian Oil Sands Ltd; NAICS: 211111; Name: Cenovus Energy Inc; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635012248

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635012248?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

ECB Math: Lending Plus Oil Equals More Action; Expansion of the ECB's Balance Sheet as Far Off as When Loosening Policy Began

Author: Barley, Richard

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

Banks took up [euro]129.8 billion of loans due September 2018 in the second of the ECB's operations that it hopes will spur lending to companies and help expand the central bank's balance sheet.

Links: 360 Link to Full Text

Full text:

The numbers just aren't adding up for the European Central Bank.

to [euro]3 trillion is almost as far off today as it was when the central bank started loosening policy in June. Sovereign bond purchases--which will present significant practical problems for the ECB and the efficacy of which is far from assured--look a step closer.

Banks took up [euro]129.8 billion of loans due September 2018 in the second of the ECB's operations that it hopes will spur lending to companies and help expand the central bank's balance sheet. Together with the first, that means banks have so far borrowed [euro]212.4 billion--only just over half of the [euro]400 billion the ECB thought the first two operations could raise.

The of Thursday's operation isn't yet clear. After September's operation, when [euro]82.6 billion was allotted, net lending to banks only expanded by [euro]46.4 billion, due to repayments and changes in other loan facilities.

The end result: the ECB's campaign has barely started. As of the last published balance sheet of Dec. 5, the ECB had only succeeded in stabilizing its size at just over [euro]2 trillion. Purchases of covered bonds and asset-backed securities have yet to move the dial, at just [euro]21.5 billion together. There will be six more loan operations, the next due in March, where allotments will depend on whether banks have achieved targets for lending.

But meanwhile, another number is moving against the ECB too. The latest steep fall in oil prices seems likely to deliver a negative headline eurozone inflation reading in the coming months. Even though cheaper oil will be good for growth, and a central bank might usually not react to such a move, the pressure on the ECB to act is becoming palpable.

The ECB at its last meeting said it intended, rather than merely expected, to expand its balance sheet. But even this semantic change failed to find unanimous support among the eurozone's central bankers.

President Mario Draghi has pointed to the balance sheet as a key element the ECB would review next year in deciding whether to take further measures. Bridging the gap to [euro]3 trillion simply doesn't look possible without more action.

Write to Richard Barley at

Credit: By Richard Barley

Subject: Central banks; Euro; Balance sheets; Eurozone

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635012250

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635012250?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Delta Expects Lower Fuel Prices to Boost Profit in 2015; Oil Drop Could Also Lead Carrier to Write-Off $1.2 Billion in Hedging

Author: Nicas, Jack

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

The No. 3 U.S. airline by traffic told investors on Thursday that it expects pretax income to jump 11% to $5 billion next year, including a net gain of $1.7 billion in cost savings from lower fuel costs.

Links: 360 Link to Full Text

Full text:

Delta Air Lines Inc. said lower fuel prices would increase its profit next year but could also force the carrier to write off $1.2 billion from fuel hedging, illustrating the consequences of oil's unexpected plunge in one of the most oil-dependent industries.

Fuel is the airline industry's biggest expense, and managing the market's fluctuations is one of its trickiest challenges. Fuel hedges, or previous agreements to purchase fuel within a set price range, are common in the airline industry. They can protect carriers from a surge in fuel prices, although when fuel prices drop, carriers with hedges don't fully benefit and sometimes have to make big financial write-offs.

Delta has been more aggressive than its peers in , in part by purchasing a Pennsylvania oil refinery in 2012 for $150 million. The carrier said a fourth-quarter profit of $75 million at its refinery would help offset a roughly $150 million hedging loss in the period.

Paul Jacobson, Delta's chief financial officer, said the refinery, hedges and efficient operations help save Delta eight cents to 10 cents a gallon on fuel when prices are stable. But, partly because of hedges, "during periods of dramatic price swings...our goal is to drive industry parity" on fuel prices.

Not all airlines hedge. American Airlines Group Inc., the world's biggest carrier by traffic, doesn't hedge and thus stands to benefit fully from the declining fuel prices. Some analysts argue that's a smarter approach.

"We continue to view fuel hedging as a waste of time, money, and effort," Hunter Keay, a Wolfe Research analyst, wrote in a recent note. Hedges cost airlines billions of dollars in 2009, "to the point where the industry would have been profitable that year had it not hedged," he wrote. "It is frustrating to see history repeating itself."

Few people expected oil's rapid descent--U.S. prices have fallen more than 40% since June--to just under $60 a barrel, a level last seen in 2009. Similarly, the price of jet fuel is down about a third over that period. It isn't clear how long the slump will last. Any rebound could change estimates for savings and hedging losses for Delta and other airlines.

Barclays airline analysts estimate that U.S. will decline by roughly $10 billion in 2015. The analysts said it is unclear how much of those savings "will flow fully to earnings, but the potential remains substantial put against our $14.5 billion pretax earnings estimate for 2014."

Delta President Ed Bastian said the airline's hedges save it about 65 cents for every dollar decrease in the price of fuel. The company is considering a smaller hedging position in 2016, but it hasn't yet "attempted to catch a falling knife" in locking in fuel prices with a 2016 hedge as oil continues to plummet.

Richard Anderson, Delta's chief executive, said the company isn't assuming oil prices will stay low. "It's wonderful that fuel has run down. We love it. There's a $2 billion opportunity out there if we hold fare levels constant," he said. But, he added, the airline always uses high-price fuel assumptions when planning, causing it to set more aggressive cost controls and goals on investment returns. "And then when it comes in lower, hang on to all of" the savings, he said.

Some analysts have worried lower fuel prices could encourage carriers to add capacity and lower fares, which would benefit fliers but weaken the financial discipline that helped transform the industry and produce record profits.

This week, Spirit Airlines Inc. said rivals in Dallas were hurting its demand by decreasing fares in response to lower fuel prices. Some of that action is likely because Southwest Airlines Co. is competing for new customers after it recently expanded there following the expiration of government restrictions on a Dallas airport.

Delta said it would use any savings from fuel to invest in its product and pay off its debt.

Barclays analysts said their peers' concerns are overstated, estimating it would take about 470 new aircraft to offset the lower fuel costs from sustained depressed prices. "Over-investing would be many, many years off," the analysts said.

Barclays analysts said that in their most conservative scenario of lower fuel prices, they increased their earnings estimates for airlines by 14% on average.

Delta shares were up 4.6% Thursday, leading a broad increase in U.S. airline stocks.

Daniel Gilbert contributed to this article.

Write to Jack Nicas at

Credit: By Jack Nicas

Subject: Airlines; Airline industry; Corporate profits; Prices; Cost control; Petroleum refineries

Location: United States--US

Company / organization: Name: American Airlines Group Inc; NAICS: 551114; Name: Delta Air Lines Inc; NAICS: 481111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635046635

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635046635?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Bank of Canada Chief Warns on Impact Of Financial Reform, Oil Prices; Stephen Poloz Says Falling Energy Prices "Always a Net Negative for Canada"

Author: Menon, Nirmala; Derby, Michael S

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

NEW YORK--The head of Canada's central bank said global financial reforms will likely weigh on the availability of credit and pose a headwind to the world's economy, while adding that falling oil prices are likely to take a notable bite out of Canadian growth.

Links: 360 Link to Full Text

Full text:

Stricter capital rules and other reforms put in place in the wake of the 2008 financial crisis will force banks to rein in risk-taking, Bank of Canada Governor Stephen Poloz said Thursday in a speech to the Economic Club of New York. Though the reforms will make the financial system safer, policy makers must ensure they don't stifle financial innovations, he said.

"It would be surprising if the net effect were not to reduce the availability of credit," he said, adding "it goes without saying that reduced availability of credit would be a headwind to economic growth." He said those tough credit conditions will likely continue to affect businesses which already suffer from a lack of credit, such as startups and smaller businesses.

Mr. Poloz said in response to an audience question that the decline in energy prices is a "positive for the global economy, that's a given." But he said sharp oil-price declines are "always a net negative for Canada," and "there's a significant hit that's on its way" for growth. Canada is a major oil producer and exporter.

Mr. Poloz tackled the U.S. monetary policy outlook in questions from reporters following his address. He praised the Federal Reserve for having clearly stated its outlook for short-term interest rates.

When the Fed lifts rates, "no one should be unprepared for this," he said. The Canadian central bank will keep a sharp eye on how Fed policy shifts might affect its nation, Mr. Poloz said. He added it will be critically important to see how the bond market reacts to any change in Fed policy. Key Fed officials have said the U.S. central bank is likely to raise rates off near-zero levels sometime in the middle of next year.

In his speech, Mr. Poloz said the retreat by banks from some types of lending could open up other channels of competition, including market-based financing and private lending. Technological advances could spur private-capital funding, such as peer-to-peer financing which directly connects lenders with borrowers via the Internet.

That type of financial innovation, rather than policy-induced growth, could be key to sustainable economic growth, he said, though he cautioned that increased participation of big institutions and hedge funds in peer-to-peer financing could pose new risks and have financial-stability implications.

Global financial reform is "absolutely essential," he said, noting the costs pale in comparison with the cost of the financial crisis, which caused a cumulative loss of global output of roughly $10 trillion, or 15% of global gross domestic product, as of the end of 2013.

Mr. Poloz also repeated that the increase in exports and business investment it is seeking to drive Canadian growth may finally have begun. His remarks came as Statistics Canada said Canadian industrial capacity use was at its highest point in about eight years in the third quarter, suggesting less slack in the Canadian economy,

He reiterated that it will take a couple more years to achieve "steady, natural growth" with inflation sustainably at the 2% target. His remarks reinforced the view that the central bank is in no hurry to raise interest rates. Most economists expect the Bank of Canada to start hiking rates late next year.

The global economy is at a "critical juncture" and policies will need to remain stimulative until global headwinds subside, Mr. Poloz said.

Write to Nirmala Menon at nirmala.menon@wsj.com and Michael.derby@wsj.com

Credit: By Nirmala Menon and Michael S. Derby

Subject: Monetary policy; Central banks; Interest rates; Banking; Economic crisis; Federal Reserve monetary policy; Economic growth; Gross Domestic Product--GDP

Location: Canada United States--US

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635052817

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635052817?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Saudi Arabia's Tank Battle With Shale; Nation Aims to Boost Oil Inventories, Driving Prices Down

Author: Denning, Liam

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

According to the latest numbers from the Department of Energy, inventories of crude oil, gasoline and distillate (including diesel) rose by a collective 15.3 million barrels in the week ended Dec 5.

Links: 360 Link to Full Text

Full text:

Like many wars, Saudi Arabia's battle to win market share involves tanks.

Storage tanks, that is. According to the latest numbers from the Department of Energy, inventories of crude oil, gasoline and distillate (including diesel) rose by a collective 15.3 million barrels in the week ended Dec 5. The expected amount: Just 800,000 barrels. The timing of this increase is especially striking because stocks are usually run down toward year end to reduce refiners' tax bills.

This echoes other signs of a build-up. The International Energy Agency reported last month that commercial oil stocks in the developed world rose by 12.6 million barrels in September, versus a five-year average decline of 8.9 million for that month. And if Saudi Arabia gets its way, the tanks will keep filling, hitting its own profits but, Riyadh hopes, hurting North American oil producers more.

Saudi Arabia wants refiners to keep processing as much oil as possible. It has been encouraging this in part by reducing the price of its oil relative to rival grades. Indeed, on Valero Energy's third-quarter earnings call last month, one of the refiner's senior executives said Saudi Arabia's barrels were back to being competitive. Only in August, U.S. imports of oil from the Persian Gulf had hit their lowest level since early 2011.

The added twist is the way Riyadh sells its oil. It offers discounts to various benchmark prices when the oil is being delivered, rather than weeks before when it is being loaded onto tankers in the Persian Gulf. As energy economist Phil Verleger points out, this significantly reduces refiners' exposure to prices moving a lot during the voyage and effectively locks in a positive margin for them, provided they can sell the resulting products. In a volatile world, that is an attractive, low-risk option for refiners.

This strategy not only helps Saudi Arabia win market share in the short term. By encouraging refiners to keep running even as global demand growth has slackened, it ensures storage tanks start to fill up.

This can be seen in what has happened to oil futures. In general, if near-term contracts are trading below those dated further out, it implies there is enough supply relative to demand. A month ago, the curve was pretty flat, with the six-month contract trading just 54 cents a barrel, or 0.7%, above the front-month price. Now, that has widened to about $1.30, or 2.1%. That move might seem small, but the curve's steepening signifies a growing sense that supply is ample.

Expect inventories to rise further in January. That is especially likely because the IEA expects almost 1 million barrels a day of new refining capacity to have opened worldwide this quarter. Those refineries will be competing with U.S. ones, putting competitive pressure on the prices of products like gasoline. This, in turn, will make Saudi Arabia's discounts on crude oil even more appealing.

As refiners keep running, and stocks build, spot prices for crude oil look set to drop toward $50 a barrel. At that point, Saudi Arabia hopes, it will have inflicted grievous wounds against the profits and share prices of at least some North American oil companies, forcing them to wave the white flag.

Write to Liam Denning at

Credit: By Liam Denning

Subject: Petroleum industry; Profits; Inventory; Market shares

Location: United States--US Saudi Arabia Persian Gulf

Company / organization: Name: Valero Energy Corp; NAICS: 486210, 324110, 211111; Name: International Energy Agency; NAICS: 928120; Name: Department of Energy; NAICS: 926130

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635061223

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635061223?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

How the Grinch Stole the Oil Glut; Economists can find a downside to anything

Author: Queenan, Joe

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]recently, the crash in oil prices was widely perceived as a Christmas present for consumers. [...]we were much better off when gas was $4 a gallon.

Links: 360 Link to Full Text

Full text:

Until recently, the crash in oil prices was widely perceived as a Christmas present for consumers. More money for gifts, food, warm clothing, toys and, for that matter, gas. Who wouldn't rejoice?

Economists, that's who. Geopolitical experts. And anyone who owns stock in oil companies. No sooner did ordinary people start celebrating their cash windfall than the Grinch showed up and started lecturing them about the dark side of lower oil prices. All that glitters is not gold, the experts told the public. Always look a gift horse in the mouth. Don't you nitwits know anything?

Here's what the experts have to say about plummeting oil prices. Lower fuel prices will lead to a consumer spending binge and that will lead to inflation. The drop will also destabilize foreign economies, contributing to political unrest, and discourage energy companies from looking for new sources of oil. It will hamper the development of alternative forms of energy. It will encourage consumers to buy gas-guzzling trucks and SUVs. It will encourage people to drive more, wrecking our highways and costing us billions of dollars in lost productivity because of employees stuck in traffic jams on I-95 or the 405.

That's not all. The drop in fuel prices will prod the Fed to raise interest rates, traumatizing the bond market and sabotaging retirees' golden years. It will lead to even more crowded planes and delayed flights. It will make people even less likely to use public transportation. It will wreck the staycation industry because everyone will go back to vacationing in Antigua instead of the local Motel 6. It will help the Chinese climb out of their economic rut, and nothing that helps the Chinese can possibly be good for us. In short, we were much better off when gas was $4 a gallon.

Poorly informed laymen might think that economists are only saying these things to be mean or because they couldn't care less about plummeting oil prices, since they all bike to work or own Priuses. But this is not true: Economists are coldblooded rationalists who would react the same way if any other industry suddenly slashed prices by 40%.

"On the surface, massively reduced movie-ticket prices might seem like a boon," an expert might say. "But cheaper tickets will attract larger crowds to Sylvester Stallone films that would otherwise bomb. This will lead to 'The Expendables XI' and 'Rambo: Thirty-first Blood.' Lower ticket prices will bring in far more teenagers, who will drink a lot of soda loaded with sugar, which will wreck their teeth, burdening our massively overextended dental-care system."

Economists would react the same way if candy makers slashed prices 40%. "Cheaper candy means fatter kids," a typical economist would argue, "which means higher clothing prices because you need a lot more denim to cover their humongous butts. Higher clothing costs lead to higher wages, which lead to inflation, which leads to labor unrest in developing countries where most of the clothes are made, which destabilizes the global economic system. And that helps the Chinese. The last thing we need in this country is lower prices on candy. Especially Swedish fish."

Massively reduced milk prices? Makes babies fat and leads to heart disease. Slashed prices on hats? Even more ironic hipster fedoras. A 40% plunge in the price of a college education? It will simply encourage more dumb kids to get a college degree, further debasing the coin of the realm.

Finally, how about a huge reduction in the cost of tickets to see Lynyrd Skynyrd or Bob Dylan, allowing impoverished baby boomers to enjoy the heroes of their misbegotten youth one last time? "It will only encourage more reunions," economists will argue, taking into account the fitness of a society in which AC/DC has just released a new record and Journey still exists. "We'll never get these guys to retire."

Credit: By Joe Queenan

Subject: Clothing; Prices; Experts; Petroleum industry; Statistical data

People: Stallone, Sylvester

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Life and Style

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635061361

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635061361?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Brazil to Back New Petrobras Debt; Brazil's Guarantee to Help State-Run Oil Company Access Capital

Author: Connors, Will; Magalhaes, Luciana

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract:

The U.S. Securities and Exchange Commission and the U.S. Department of Justice are of alleged wrongdoing at Petrobras because the company's shares trade in the U.S. Petrobras executives have said previously that they are cooperating with authorities on the investigation and have set up a compliance division at the company to address the alleged corruption.

Links: 360 Link to Full Text

Full text:

RIO DE JANEIRO--The Brazilian government will help beleaguered state-run oil firm Petroleo Brasileiro SA raise money by guaranteeing its debt as part of an effort to stave off damage from falling oil prices and a corruption scandal.

Brazil will guarantee debt issuance of an unspecified amount by Petrobras, supported in part by $3.4 billion that Petrobras lent the country's state-run power company, Eletrobras, according to a spokeswoman for the Ministry of Mines and Energy.

The plan could be announced as early as this week, according to the spokeswoman.

A Petrobras representative declined to comment.

Petrobras's access to capital markets is restricted until it reports its audited third-quarter earnings. The company said last month that it has enough cash on hand to cover investments and operations for the next six months. Petrobras is expected to issue unaudited third-quarter results Friday.

Petrobras is in the midst of an ambitious, $221 billion spending plan over the next five years as it develops offshore oil fields and ramps up production. But a widespread corruption scandal involving alleged overpayment for Petrobras contracts could crimp the company's ability to raise money.

after its auditor, PricewaterhouseCoopers, declined to sign off on the results amid a widespread corruption probe at the company. A PricewaterhouseCoopers spokeswoman declined to comment.

Brazilian prosecutors said during a press conference Thursday that at least 35 people, including two former Petrobras executives and more than a dozen executives from the country's biggest construction firms, participated in an alleged scheme to pay bribes for Petrobras contracts. At least 12 of those construction-industry executives were indicted this week on charges of money laundering, fraud and corruption, according to a person familiar with the investigation.

The U.S. Securities and Exchange Commission and the U.S. Department of Justice are of alleged wrongdoing at Petrobras because the company's shares trade in the U.S.

Petrobras executives have said previously that they are cooperating with authorities on the investigation and have set up a compliance division at the company to address the alleged corruption.

Shares in Petrobras were down 3.7%, to $7.46, on the New York Stock Exchange at midday. Shares are down 57% over the last three months.

Write to Will Connors at and Luciana Magalhaes at

Credit: By Will Connors And Luciana Magalhaes

Subject: Corruption in government; Petroleum industry; Money laundering

Location: Brazil

Company / organization: Name: Petroleos Brasileiro SA; NAICS: 211111; Name: PricewaterhouseCoopers LLP; NAICS: 541211, 541611; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Department of Justice; NAICS: 922130

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635077657

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635077657?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Asian Morning Briefing: Oil Prices Extend Decline

Author: Anonymous

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

MARKETS AT A GLANCE

(Data as of approximately 5 p.m. ET)

LAST CHANGE % CHG 17596.3 63.19 0.36% 4708.16 24.14 0.52% 2035.33 9.19 0.45% Japan: Nikkei 225 17257.4 -155.18 -0.89% Hang Seng 23312.5 -211.98 -0.90% Shanghai Composite 2925.74 -14.26 -0.49% S&P BSE Sensex 27602 -229.09 -0.82% Australia: S&P/ASX 5231 -28 -0.53% UK: FTSE 100 6461.7 -38.34 -0.59%

PRICE CHG YIELD% U.S. 2 Year -2/32 0.604 U.S. 5 Year -5/32 1.597 U.S. 10 Year 0/32 2.162 Australia 10 Year -11/32 2.912 China 10 Year -3/32 3.750 India 10 Year 1/32 7.869 Japan 10 Year 0/32 0.412 German 10 Year 1/32 0.680

LAST(MID) CHANGE Australia $ (AUD/USD) 0.827 -0.0001 Yen (USD/JPY) 118.75 0.09 S. Korean Won (USD/KRW) 1102.84 0 Chinese Yuan (USD/CNY) 6.1884 -0.0004 Euro (EUR/USD) 1.2412 0.0001 WSJ Dollar Index 81.67 0.02

LAST CHANGE % CHG Crude Oil 59.18 -1.76 -2.89% Brent Crude 63.59 -0.97 -1.50% Gold 1228.4 -1 -0.08%

SNAPSHOT

Oil extended its losing streak, with U.S. prices dropping below $60 a barrel for the first time in more than five years. Robust U.S. retail-sales data boosted stocks and the dollar, while sending Treasurys mostly lower and also weighing on gold prices.

OPENING CALL

China on Friday will release retail sales and industrial output data for November. As manufacturing and heavy industry slow, China needs consumption to pick up the baton of growth. And although retail sales are growing at a healthy double-digit clip, it's not clear that Chinese consumers can buy enough stuff to close an output gap that's pushing the economy into a slower growth scenario.

EQUITIES

U.S. stocks ended higher with help from stronger-than-expected data on consumer spending, but fell back from their best levels as oil prices slumped.

Stocks were buoyed by data showing U.S. retail sales rose a seasonally adjusted 0.7% in November from a month earlier. Economists surveyed by The Wall Street Journal had expected overall sales to rise 0.4%. A decline in the number of Americans filing for first-time jobless benefits last week also cheered investors, who said they viewed the decrease as a sign that the labor market continues to improve.

In corporate news, shares of Staples jumped nearly 9% after Starboard Value LP disclosed in filings that it has built a roughly 6% stake in the company. The activist investor also boosted its position in Office Depot to about 10%. Shares of Office Depot rose 12%.

RadioShack outlined a $400 million cost-cutting plan it hopes will stanch a hemorrhage of cash, as the struggling electronics chain tries to get through the holiday season in good enough shape to trigger a rescue plan from its lenders. Shares fell 7.3%.

Shares of Lending Club opened at $24.75 in their trading debut, well above their initial public offering price of $15, and valuing the company at nearly $9 billion. Shares closed up 56%.

In Asian trading Thursday, stocks fell as a downturn in oil prices rippled through the region and pressured Chinese state-owned energy companies and major oil producers in Australia in particular.

FOREX

The dollar rose against the yen and the euro as stronger U.S. retail sales numbers for November nudged forward market expectations for higher interest rates.

The greenback's gains return the U.S. currency to its upward trajectory against rivals. Investors in large numbers had been wagering on the dollar strengthening in the belief that an improving U.S. economy would move the Federal Reserve to raise interest rates before other central banks.

Over the past three sessions, though, investors had been exiting some of those bullish bets on the dollar and moving into haven assets such as the yen amid concerns that the drop in oil to its lowest price in more than five years would weigh on already low inflation in economies around the world.

"The dollar's recent correction, if you want to call it that, had exhausted itself," said Marc Chandler, global head of currencies at Brown Brothers Harriman. "We got to around $1.25 against the euro earlier this morning. The correction was already ending; the retail sales numbers just pushed it along."

U.S. retail sales rose 0.7% in November from a month earlier, marking the largest increase in eight months. Removing autos, a volatile category, sales rose 0.5% last month. Economists predicted overall sales would increase 0.4%, and those sales excluding autos to rise 0.1% in November.

The retail sales numbers, joining a robust November U.S. jobs report, should sit well with the Fed, said Steven Englander, head of developed-market currency strategy at Citigroup Inc.

BONDS

Benchmark 10-year U.S. Treasury notes pulled back for the first time this week as an upbeat U.S. consumer spending report sapped demand for haven assets.

But the 30-year Treasury bond strengthened after a $13 billion sale of same-maturity U.S. government debt drew the highest demand in nearly two years. The auction result underscores the broad appeal of long-dated Treasury bonds whose returns this year have beaten stocks and gold.

Demand for long-dated Treasury bonds has fired up this year as uneven global economic growth and low inflation have boosted the allure of highly-liquid financial assets even as the U.S. growth has gained momentum.

Treasury bonds maturing in more than 25 years have posted a total return of 25.7% this year through Wednesday, according to data from Barclays. The overall Treasury debt market has returned 4.97%.

The 30-year Treasury has drawn buyers as it offers the highest yield in the U.S. government bond market. The yield is also higher than those offered by comparable-maturity government bonds from Germany, the U.K., Japan and France.

"Global yields are so low that there is overwhelming demand for high quality higher yielding assets and the long end of the U.S. bond market looks like a high yielder to Asian and European money mangers and reserve managers," said Tom Tucci, head of Treasury trading in New York at CIBC World Markets.

Buyers piled into Thursday's 30-year bond sale even as they ended up getting a yield of 2.848%, the lowest for the maturity since November 2012.

Indirect bidding for the 30-year auction, a gauge of foreign demand, rose to 49.8%, the highest since July.

The 30-year bond's price had fallen earlier Thursday after U.S. retail sales climbed 0.7% in November from a month earlier, the biggest jump in eight months.

The release was the latest evidence that the world's largest economy has gained traction, bolstering investors' expectations that stronger growth will allow the Federal Reserve to start raising interest rates next year for the first time next year since 2006.

COMMODITIES

The benchmark U.S. oil price dropped below $60 a barrel for the first time in more than five years, extending a losing streak as investors and traders brace for a global supply glut to worsen through next year.

Brent crude, a gauge of global prices, also settled lower.

"Everything that's been weighing on oil continues to weigh on it, and there's been no relief," said John Kilduff, founding partner of Again Capital. "It's just a complete rout."

On Thursday, prices rebounded briefly into positive territory following the release of better-than-expected U.S. retail sales data before falling again on the heels of a stronger dollar.

Gold futures closed lower as upbeat U.S. economic data bolstered the dollar and fanned expectations of tighter monetary policy from the Federal Reserve.

TODAY'S HEADLINES

U.S. Oil Prices Drop Below $60

U.S. Retail Sales Jump as Consumers Gain Strength

Americans stepped up spending last month on goods from cars to restaurant meals to gardening supplies, boosting hopes for a brisk holiday retail season and lifting the economy's outlook. In other data, weekly jobless claims fell and November import prices declined.

China Adds Cash to Banking System

China's central bank is pumping nearly $65 billion into the banking system in an effort to spur growth, even as its leaders express a willingness to accept a "new normal" of a slower economic pace.

SEC Targets Risks at Fund Firms

The Securities and Exchange Commission announced sweeping steps to address risks in the asset-management industry. Among the most significant ideas is a plan that would likely cause funds to curb their use of risky derivatives to boost returns.

KFC China Moving to More Local Model

Yum Brands is revamping its KFC chain in China as the restaurant company seeks to turn around its business in a market that has been reeling from food supplier issues.

Toyota Takes Reins in Air Bags Investigation

Toyota Motor is seizing the leadership in the auto industry's investigation of defective air bags by convening a meeting of car makers in the U.S. to discuss a joint investigation of faulty air bags made by Japan's Takata.

Banks Fined Over Pursuit of Toys 'R' Us IPO

Ten Wall Street banks were fined Thursday over how they hustled for business on an initial public offering, in a settlement that could reshape the role of banks' stock analysts in pitches for IPO work.

Fannie, Freddie to Make Affordable-Housing Payments

Fannie Mae and Freddie Mac's regulator ordered the companies to begin to make payments to affordable-housing funds next year, a move that will please low-income-housing supporters who have urged the decision for years while triggering the ire of some who think it will increase taxpayer risk.

Spain's Publishers Forced to Charge Google News

Google's announcement that it would pull the plug on the Spanish version of Google News in response to a restrictive copyright law is the first time the U.S. tech giant has removed a local version of its news aggregation service from any country.

Sony to Sell PlayStation4 Consoles in China

Sony said that it would begin selling its latest-generation PlayStation 4 videogame console in China starting next month, but it remained unknown whether the console would be region-locked.

RECENT DJ DOMINANTS

White House Held Call With Federal Agencies to Prepare for Possible Shutdown

Warner Bros. Entertainment Names Kim Williams As Finance Chief

Economists See Strong Growth in 2015

Ex-CIA Director Petraeus Says He Opposed Torture

Momo CEO Says Will Be Profitable in 'Near Future'

TODAY'S CALENDAR

(Times in GMT, followed by country and event)

0030 AUS Oct Lending Finance

0200 NZ Nov NZ Government bonds held for non-residents

0200 SRI Dec Central Bank of Sri Lanka Monetary Policy Review announcement

0200 JPN Nov Electric Power Output

0430 JPN Oct Revised Retail Sales

0430 JPN Oct Revised Industrial Production

0530 CHN Nov Industrial Output

0530 CHN Nov Retail sales

0530 CHN Nov Fixed Assets Investment

0700 GER Nov WPI

0730 THA Weekly International Reserves

0745 FRA Oct Balance of Payments

0830 HK Q3 Quarterly Index of Industrial Production & Quarterly Producer Price Indices for Manufacturing Industries

0900 ITA Nov CPI

0900 FRA Dec IEA Oil Market Report

1000 EU Q3 Employment

1000 EU Oct Industrial Production

1130 IND Weekly foreign exchange reserves

1200 IND Oct IIP Index of Industrial Production

1200 IND Nov CPI rural, urban and combined

1330 US Nov PPI

1330 CAN Oct New motor vehicle sales

1500 US Dec Thomson Reuters / University of Michigan Survey of Consumers - preliminary

1900 CAN Bank of Canada Weekly Financial Statistics

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 11, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635094842

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635094842?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Halliburton to Lay Off 1,000 Workers Outside the U.S. Oil-Field Service Company Cuts Jobs as Oil Prices Plunge

Author: Molinski, Dan

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

Halliburton and others are hired by big multinational oil companies, Texas wildcatters and government-controlled energy concerns overseas to drill and frack wells.

Links: 360 Link to Full Text

Full text:

Halliburton Co., the world's second-largest oilfield-services company, said Thursday it will lay off 1,000 employees outside the U.S.

The Houston company is cutting its workforce in offices across Europe, Russia, the Middle East and Africa in the face of a nearly 45% .

The job cuts, which are effective immediately, come less than a week after the largest oilfield services company, Schlumberger Ltd., announced it would reduce its headcount. Halliburton employs 80,000 people in 80 countries, so the job cuts amount to 1% of its global workforce.

Last month, Inc., in a deal valued at $35 billion. When those plans were made public Halliburton said that layoffs weren't coming and that the merged companies would add thousands of new jobs in the coming year.

That deal is still pending and .

Oil prices have been falling since late June, but in the three weeks since the Halliburton-Baker Hughes merger was announced price drops have accelerated. The U.S. benchmark oil price settled Thursday at $59.95 a barrel, a level not seen since 2009. Brent crude, considered the global oil benchmark price, settled Thursday at $63.68, down from a 2014 high of more than $115 a barrel.

"The decision to eliminate jobs is never easy. Our talented workforce is the foundation of everything we accomplish, and we place the highest value on the commitment and hard work that our employees dedicate to building our company," Halliburton said in a statement. "Yet, we believe these job eliminations are necessary in order to work through this market environment."

Oil-field service companies help energy producers explore for oil and gas. Halliburton and others are hired by big multinational oil companies, Texas wildcatters and government-controlled energy concerns overseas to drill and frack wells. These service firms sell and rent specialized equipment, operate drilling rigs and supply workers for oil-field sites, often offering it all in packages charged at a daily rate.

For several years as oil prices increased the amount that oil-field service companies could charge for their expertise climbed. But drilling plans and ask for services at deep discounts.

Halliburton's chief financial officer, Mark McCollum, told investors Wednesday that the company would make some job cuts but he didn't say how many. "We're already pulling in," he said, adding that he expected a $75 million restructuring charge during the fourth quarter "as we trim out some headcount and activities."

Explaining the need for such measures, Mr. McCollum pointed to the depressed oil market, which is known for booms and busts. "It's not our first rodeo," he said. "We know how to do this."

Write to Dan Molinski at

Credit: By Dan Molinski

Subject: Petroleum industry; Workforce

Location: Russia United States--US Africa Europe Middle East

Company / organization: Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635103851

Document URL: https://login.ezproxy.uta.edu/login?ur l=https://search-proquest-com.ezproxy.uta.edu/docview/1635103851?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Mexico Offers First Oil Blocks to Private Firms; The 14 Exploratory Fields in the Gulf of Mexico Will Be Awarded in Mid-July

Author: Iliff, Laurence

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

MEXICO CITY--A year after changing laws to allow private firms back into the oil sector after 76 years of state control, Mexican officials on Thursday unveiled the first oil and gas blocks that will kick off next year's bidding round.

Energy Ministry officials said they expect the blocks--14 exploratory fields in the Gulf of Mexico near the nation's top-producing fields--to generate solid interest among private firms. The exploratory areas are near two supergiant oil complexes in the southern Gulf--Cantarell and Ku-Maloob-Zaap--and have good possibilities of containing commercial quantities of oil and gas, they said.

The bidding round for the shallow-water blocks is just the first part of a larger process that will unfold next year in what the Mexican government is calling Round One, even though it is really a series of bidding rounds starting in July and running through the end of the year.

"We are fully aware that this bid round is taking place in the context of volatile markets for crude-oil prices that will force companies to be more selective in choosing the countries and projects where they will invest," Energy Minister Pedro Joaquín Coldwell said at an event attended by politicians and executives from private and foreign oil companies.

Mexico is competitive in the current price environment, Mr. Coldwell added, since it offers "a highly diversified portfolio of fields and areas for exploration and production, clear and stable rules for investment, a modern energy reform incorporating international practices, qualified labor, infrastructure, moderate production costs and less geological risk."

The 14 exploratory fields, to be awarded in mid-July, have prospective resources of 687 million barrels of oil equivalent, and together could produce about 80,000 barrels a day, said Juan Carlos Zepeda, the head of the National Hydrocarbons Commission which is in charge of the bidding process. Each of the fields is expected to require about $1 billion in investment.

Prospective resources are rough estimates before exploratory wells are drilled and aren't comparable to proven or probable reserves where oil actually has been discovered.

Should commercial quantities of oil be discovered in the exploratory blocks, the hydrocarbons commission will apply production-sharing contracts to divide up the oil between the private firms and a government fund, officials said. National oil company Petróleos Mexicanos, or Pemex, is also allowed to participate in the bid rounds under the same conditions as private firms.

Officials didn't give out full details of the tax and royalty structure, since the government will determine a crucial element--the minimum percentage of the resources that the government will keep--closer to the bid round, said Deputy Finance Minister Miguel Messmacher.

The government also provided other details industry officials have been awaiting to determine if the contracts would be competitive with others around the world, especially those in the U.S., which is considered to have one of the more favorable models for oil and gas development.

For example, Mexican regulators said that winners of the exploratory blocks would need to meet national content requirements of 25% at the beginning of the contract and 35% in later years. National content includes Mexican goods, services and labor.

The contract length for the first blocks will be 25 years, with two extensions of five years each if certain conditions are met, such as increasing investment. Oil firms must also meet a set of technical and financial requirements before they can bid, such as minimum capital requirements.

Jose Valera, an energy lawyer at Mayer Brown in Houston, said one aspect of the contract terms that seems excessive is the requirement of having at least $1 billion in assets to bid on the shallow-water contracts announced Thursday.

"To me, they are unnecessarily limiting the potential pool of operators coming in," Mr. Valera said. In contrast, the national content requirements and contract lengths seem more reasonable, he added.

In early 2015, the government will announce the basic contract terms for mature fields where oil already has been discovered but production has fallen, unconventional resources like oil and gas found in shale rock, and in the deep waters of the Gulf of Mexico, an area considered highly attractive to international oil companies that operate on the U.S. side of the waterway.

Credit: By Laurence Iliff

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635103915

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635103915?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil's Drop Spills Into Other Assets; Crude Falls Below $60 a Barrel, Pressuring Stocks and Oil-Linked Currencies

Author: Hong, Nicole; Cox, Josie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

The benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years, intensifying the pain across financial markets and jolting the central banks of some oil-dependent economies into action. Stocks of oil-producing companies and currencies of oil-exporting countries dropped as investors braced for sharply lower revenue, a result of the fastest selloff in oil prices since the 2008 financial crisis.

Links: 360 Link to Full Text

Full text:

The decline in oil weighed on U.S. stocks on Thursday. The Dow Jones Industrial Average was up as much as 225 points on strong U.S. economic data before paring gains amid a renewed descent in crude. The blue-chip index ended up 63.19 points, or 0.4%, to 17596.34.

Stocks of oil-producing companies and currencies of oil-exporting countries dropped as investors braced for sharply lower revenue, a result of the fastest selloff in oil prices since the 2008 financial crisis.

The drop in crude oil comes as policy makers are grappling with low inflation and sluggish global growth, although it is proving to be a boon to consumers who are benefiting from the lower cost of gasoline and other fuels. Officials are concerned about the prospect of deflation, a damaging spiral of falling prices and slowing spending, in some regions of the world such as Japan and Europe.

"I don't want to say this is Wall Street versus Main Street, but Main Street will see the positive effects in their pocketbooks while Wall Street's more focused on the clouds rather than the silver lining," said Drew Matus, an economist at UBS.

Currencies of big oil exporters, from Norway to Russia to Mexico, hit multiyear lows against the dollar. London's FTSE 100 index, a large proportion of which is exposed to the oil and gas sector, fell 0.6%, while indexes in the Middle East, a big crude producer, took a dive.

The front-month oil contract for January delivery fell 99 cents, or 1.6%, to settle at $59.95 a barrel, on the New York Mercantile Exchange, the lowest settlement level since July 2009, when the world was in the midst of recession. This year, oil has lost 39%.

Although the U.S. doesn't export crude, its oil-output boom has helped drive economic growth since the crisis. The prospect of slowing investment into the energy sector helped offset some of the optimism spurred by better-than-expected November retail sales figures, which were released on Thursday.

Energy companies have been the worst-performing sector in the S&P 500 over the past month, down 13% compared with a 0.2% decline for the broader index. And if gasoline prices fall too much, that could slow already-tepid inflation in the U.S. and potentially disrupt any plans by the Federal Reserve to raise interest rates next year, some economists said.

Still, the impact of the decline in crude in the U.S. economy is limited. Energy investment accounts for 1% of U.S. growth, while consumer spending makes up 70%, according to UBS.

Other countries face more difficult challenges.

In response to oil's fall, Norway's central bank unexpectedly cut a key interest rate to 1.25% from 1.5%, its first rate cut since March 2012. As the world's second-biggest oil exporter outside of the Organization of the Petroleum Exporting Countries, Norway's economy is reliant on oil. Norges Bank, which made the move to combat slowing domestic growth, said "activity in the petroleum industry is set to be weaker than projected earlier."

The rate cut sent the Norwegian krone to a five-year low against the euro and an 11-year low against the dollar.

Russia, meanwhile, raised interest rates to shore up the ruble. The currency, which has repeatedly hit record lows against the dollar this year, has been battered by geopolitical tensions and resulting sanctions, but its decline has been exacerbated in recent months. About 50% of Russia's annual budget revenue stems from oil and gas exports.

Tim Ash, head of emerging-market research for Standard Bank, said Russia was "a rabbit caught in the headlights."

The central bank doesn't want to further spend down reserves by propping up the ruble and is only reluctantly raising rates for fear of pushing the economy deeper into recession, Mr. Ash said.

Mexico's central bank intervened in currency markets to bolster the peso for the first time in 21/2 years. The action came just two days after the country reactivated an auction system to support the peso, which on Thursday dropped to its weakest level against the dollar since March 2009. Oil-related revenue makes up a significant part of Mexico's federal coffers, although oil accounts for less than 10% of the country's exports.

In the Middle East, Dubai's market fell 7.4%. The main index in Abu Dhabi dropped 4.7%, Qatar slid 4.3% and Oman declined 4.2%.

Driving the decline in oil prices is a global supply glut, caused by the combination of rapidly rising production in the U.S. and elsewhere and modest demand growth. The decline in oil prices accelerated late last month after OPEC opted to maintain its output target.

"Everything that's been weighing on oil continues to weigh on it, and there's been no relief," said John Kilduff, founding partner of asset manager Again Capital. "It's just a complete rout."

Chiara Albanese and Anthony Harrup contributed to this article.

Write to Nicole Hong at and Josie Cox at

Credit: By Nicole Hong And Josie Cox

Subject: American dollar; Economic conditions; Recessions; Central banks; Petroleum industry

Location: Mexico United States--US Russia Norway

Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635104078

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635104078?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Japan Shares Rise as Oil Slips Further; Nikkei Gains, Oil Prices Continue Slide

Author: Deng, Chao; Frischkorn, Bradford

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

"There remains plenty of technical resistance at the 18000 Nikkei level, but forthcoming data, including U.S. [December] consumer sentiment [and] next week's Federal Open Market Committee meeting, will be critical to determining market direction."

Links: 360 Link to Full Text

Full text:

Japan stocks finished higher Friday ahead of weekend elections that could boost support for Prime Minister Shinzo Abe's aggressive reform policies, although falling crude prices sapped strength from the region's markets, including in Australia.

The Nikkei Stock Average rose 0.7% to 17371.58 Friday, although it still closed the week down 3.1%, its worst percentage fall since mid-October.

Investors now look forward to Sunday's important lower house parliamentary elections, where the ruling government coalition is seen likely to retain its grip on power.

Gains in Tokyo also came after Thursday with the help of better-than-expected data on U.S. consumer spending.

"The recent three-day selloff put stocks back in 'affordable' territory after valuations had started to look stretched," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities. "There remains plenty of technical resistance at the 18000 Nikkei level, but forthcoming data, including U.S. [December] consumer sentiment [and] next week's Federal Open Market Committee meeting, will be critical to determining market direction."

An continued to batter energy stocks in Asia. The benchmark U.S. oil price , its lowest level since July 2009, and was last at $59.48.

Australia's S&PASX 200, where major oil producers trade, was down 0.2%, at 5219.6 and 2.2% weaker for the week.

The country's three biggest iron-ore producers were all lower, with BHP Billiton Ltd. down 1.9%, Rio Tinto Ltd. down 2.5% and Fortescue Metals Group down 2%. BHP's shares, which have also been hit by concerns over the impact of weaker oil prices on its petroleum division, dropped 6.4% over the course of the week.

In Hong Kong, the Hang Seng Index was down 0.3% to 23249.20, after China's economy showed fresh signs of weakness in November--industrial output growth slid to a three-month low and investment extended its sluggish trend, according to data Friday.

Still, stocks on the mainland were up after a volatile week where analysts have questioned the sustainability of a rally that has put the Shanghai Composite Index up 39% year to date. The index edged up 0.4% to 2938.17 Friday and closed flat for the week.

Robb W. Stewart contributed to this article.

Write to Chao Deng at and Bradford Frischkorn at

Credit: By Chao Deng and Bradford Frischkorn

Subject: Petroleum industry; Stock exchanges; Financial performance

Location: Japan United States--US Australia

People: Abe, Shinzo

Company / organization: Name: Rio Tinto Group; NAICS: 212112, 212291; Name: BHP Billiton; NAICS: 211111, 212231, 212234; Name: Fortescue Metals Group; NAICS: 212210; Name: Federal Open Market Committee--FOMC; NAICS: 921130

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635106219

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635106219?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil-Price Plunge Continues on Lower Demand Forecast; U.S. Oil Benchmark Remains Below $60 a Barrel

Author: Friedman, Nicole

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

Money managers, including hedge funds and pension funds, added 724 wagers on higher prices in the week using both futures and options contracts and cut 6,169 bets that prices would fall, according to the U.S. Commodity Futures Trading Commission.

Links: 360 Link to Full Text

Full text:

Oil markets slid to new lows Friday after the International Energy Agency lowered its forecast for demand growth in 2015, the latest sign that the market could remain oversupplied well into next year.

Concerns about a global oil glut have sent prices plunging more than 45% since mid-June, and the selloff has accelerated since the Organization of the Petroleum Exporting Countries decided last month to maintain its production quota.

Falling oil prices are expected to boost economic growth, especially in large consuming nations, but they could threaten the economic health of oil producers and lead to lower investment in expensive drilling projects.

The national average price of retail gasoline in the U.S. fell to $2.60 a gallon Friday, the lowest average since December 2009, according to AAA. The auto club expects prices to fall to $2.50 a gallon before Christmas.

On Friday, the Paris-based IEA cut its forecast for 2015 oil demand growth by 230,000 barrels a day to 900,000 barrels a day. The energy watchdog has cut its demand-growth forecast five times in the last six months.

"We've had a plunge in prices...and the IEA is still lowering the demand forecast," said Stephen Schork, editor of industry newsletter The Schork Report. For prices, "no one can tell you where the floor is right now."

Light, sweet crude for January delivery fell $2.14, or 3.6%, to $57.81 a barrel on the New York Mercantile Exchange, the lowest settlement price since May 15, 2009. Prices slid 12.2% this week and are down 41% year-to-date.

Brent, the global benchmark, fell $1.83, or 2.9%, to $61.85 a barrel on ICE Futures Europe, the lowest level since July 14, 2009. Prices are down 10.5% on the week and 44% on the year.

OPEC and the U.S. Energy Information Administration also lowered their demand forecasts for 2015 this week.

"The market really has nothing going for it right now--there's nothing encouraging," said Andy Lebow, senior vice president for energy at Jefferies LLC. "There's no prospect of near-term production cuts."

The drop in oil prices has also hammered energy stocks and weakened the currencies of oil-producing nations, forcing some central banks to respond.

Meanwhile, investors closed out bets that U.S. oil prices would fall in the week ended Tuesday, just before prices dropped to fresh lows, according to data released Friday.

Their aggregate wagers on rising prices, or net-long position, rose 3.7% in the week to 191,268 contracts, its highest level since Oct. 7, on the New York Mercantile Exchange.

Some market participants said a growing speculative bet on rising prices means that prices could have further to fall, because prices aren't likely to reach a bottom until most of the speculative buyers are squeezed out.

In other trading, January reformulated gasoline blendstock, or RBOB, settled down 2.71 cents, or 1.7%, at $1.5973 a gallon, the lowest settlement since May 5, 2009. Prices posted a 9.9% loss on the week.

January diesel slid 4.54 cents, or 2.2%, to $2.0160 a gallon, the lowest price since August 2010. Prices fell 4.4% this week.

Georgi Kantchev and Sarah Kent contributed to this article.

Write to Nicole Friedman at

Credit: By Nicole Friedman

Subject: Petroleum industry; Futures; Crude oil prices

Location: United States--US

Company / organization: Name: Jefferies LLC; NAICS: 523110; Name: International Energy Agency; NAICS: 928120; Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635156058

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635156058?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Markets Slide Further on Oil Shock; Currencies in Russia, Norway Fall to Multiyear Lows

Author: Cox, Josie

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

"Falling oil prices have sparked weakness in the U.S. high-yield markets, which amid thin liquidity is intensifying volatility across fixed income assets," Barclays economists wrote in a note.

Links: 360 Link to Full Text

Full text:

Oil's to spur global financial market losses on Friday, sending currencies in Russia and Norway to fresh multiyear lows and causing sharp losses to the major European equity indexes.

58 against the dollar for the first time on record, while Norway's krone hit a new five-year low against the euro and an 11-year low against the dollar.

Brent crude and West Texas Intermediate settled below $58--both fresh 5½ year lows.

The Stoxx Europe 600 index closed the session down 2.5%, with the European subindex of oil and gas companies falling 3.6%.

London's FTSE 100, which has a very high exposure to the oil and gas sector, declined 2.5% and notched up its biggest weekly loss in around two years. However, losses were also heavy in the other core indexes, with the DAX in Frankfurt dropping 2.7% and the CAC-40 in Paris ending down 2.8%. In the U.S., the S&P 500 dropped more than 1% in late European trade.

Russia's central bank on Thursday to 10.5% from 9.5%, and its deposit rate to 9.5% from 8.5%, in an effort to halt the ruble's slide. However, economists broadly agree such a move isn't enough.

"In my view, the risk of a full-scale currency crisis is still high and the Bank of Russia may have to use all tools at its disposal to stem ruble rout," said Piotr Matys, a currency strategist at Rabobank. He said he had been expecting a 2.5-percentage-point increase in the key interest rate. "The decision taken proved insufficient."

Strategists at Sberbank also said that they weren't convinced that the rate increase would have a significant impact.

"Unless the Central Bank decides to step in with bolder actions, we wouldn't expect its policy adjustments to alter the ruble's trajectory," they write in a note.

The ruble was battered earlier this year by geopolitical conflict and resulting sanctions, but its decline has been exacerbated in recent months by the oil-price shock, especially after the 12-member Organization of the Petroleum Exporting Countries last month rejected calls for drastic action to cut their output. Around 50% of Russia's annual budget revenue stems from oil and gas exports.

Also on Thursday, Norges Bank to 1.25% from 1.5% to combat slowing domestic growth, specifically citing the tanking price of oil. Norway is Europe's biggest crude exporter and Norges Bank said that "activity in the petroleum industry is set to be weaker than projected earlier."

The negative tone was also starting to seep into the debt markets, too.

"Falling oil prices have sparked weakness in the U.S. high-yield markets, which amid thin liquidity is intensifying volatility across fixed income assets," Barclays economists wrote in a note.

Robert Montague, a senior investment analyst at ECM Asset Management, with is owned by Wells Fargo and has around $9.5bn of assets under management, says that contingent capital bonds issued by banks were starting to sell off particularly aggressively.

So-called cocos are generally considered the riskiest forms of bank debt.

The CBOE Volatility Index, commonly considered a fear gauge of financial markets, rose 8% overnight, reflecting investors' appetite for assets seen as safest during times of stress.

The yield on German 10-year government bonds hit a record low of 0.631%. Yields fall when prices rise.

Beyond oil, lasting jitters stemming from political uncertainty in Greece also pressured equities.

Earlier in the week, the Greek government announced that the parliament would on Dec. 17--two months ahead of schedule--to replace Karolos Papoulias, whose five-year term was slated to end in March.

The move sparked fears that Greece's radical left opposition Syriza party if presidential voting rounds failed to find a solution acceptable to all.

"We wouldn't rule out the possibility that mainstream parties can cobble together the majority needed to win support for a presidential candidate. Nevertheless, the political outlook for Greece remains highly fraught," Citigroup economists write in a note.

Athens's main stock exchanged tumbled 7% on Thursday having already closed around 12% lower during Wednesday's session. On Friday it ended the session an additional 0.4% lower.

The yield on the country's 10-year government bond stood at 9% late Friday. Only earlier this week, it was around 7.2%.

In currency markets, the euro was around 0.6% higher against the dollar at around $1.2445, marginally higher after figures showed that factory output across the 18 countries that share the euro in October, albeit at a modest pace.

Employment and industrial production, however, remain well below their precrisis levels and there is no sign the eurozone's recovery is set to accelerate to a pace that would quickly create large numbers of new jobs, or end a long period of very low inflation.

Many analysts expect the European Central Bank to announce a government bond purchase plan to stimulate the recovery as early as Jan. 22, when it next meets. That prospect was reinforced by weak demand for the ECB's second installment of a four-year lending program for banks, results for which were published Thursday.

"Industrial confidence has improved a bit in the eurozone, however, with the economy running well below capacity and inflation likely to fall further, we continue to look for a major quantitative easing announcement in January," currency strategists at BNP Paribas wrote in a note.

They also reiterated their recommendation of selling the euro against both the U.S. dollar and the British pound.

Paul Hannon contributed to this article

Write to Josie Cox at

Credit: By Josie Cox

Subject: Petroleum industry; Securities markets; Currency; Energy industry; Natural gas utilities

Location: Norway Russia

People: Papoulias, Karolos

Company / organization: Name: Afren PLC; NAICS: 324110, 211111; Name: Genel Energy PLC; NAICS: 211111; Name: Norges Bank; NAICS: 521110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635169505

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635169505?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Plunging Oil Prices Won't Dent Supply in Short Term; International Energy Agency Provides Little Relief for Oil Bulls in Its Monthly Report

Author: Kent, Sarah

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

According to the IEA, the oil-producers' group cut its oil production by 315,000 barrels a day in November, largely due to .

Links: 360 Link to Full Text

Full text:

The International Energy Agency slashed its forecast for global oil demand growth for the fifth time in the last six months on Friday and said the current slide in prices won't dent global supply or hit demand, at least in the short term.

Despite a slide of since June, the Paris-based energy watchdog said it still expects a robust increase in production from nations outside the Organization of the Petroleum Exporting Countries next year.

"Barring a disorderly production response, it may well take some time for supply and demand to respond to the price rout," the IEA said in its closely watched monthly report on the oil market.

following the IEA's bearish forecasts, hitting levels not seen since the depth of the global recession in 2009. Brent for January delivery was down 0.8% at $63.22 on the Intercontinental Exchange in London, while WTI was down 0.7% at $59.23 in electronic trading on the New York Mercantile Exchange.

The IEA forecast that world oil demand will increase by 900,000 barrels a day in 2015, a downward revision of 230,000 barrels a day from the previous report and only a modest increase from this year's increase in demand of 700,000 barrels a day, its weakest in five years.

Ordinarily, lower prices should encourage greater consumption, but the pain that oil-exporting economies are already feeling because of the price slump, combined with a sluggish global economy, is expected to offset any positive demand impact from the weak market, the IEA said.

Demand in Russia, a major oil producer, is expected to be particularly hard hit next year as a combination of western sanctions and sliding oil prices pummel the country's economy.

Meanwhile, although oil companies are already slashing spending in response to lower prices, many of the projects expected to fuel higher production next year have already been paid for, pushing any impact on output into the future, the IEA said.

In the U.S., where are coming under intense scrutiny as oil prices plummet, there should be no production impact in the short term so long as producers maintain access to financing, the IEA said. Booming shale oil output is expected to push non-OPEC supply growth to a record high of 1.9 million barrels a day this year and though that will slow next year to 1.3 million barrels a day, that is not because of the lower price environment.

"Today's oil spending cuts will dent supply--just not right now," the IEA said, though it added that a deeper slide in prices could set back many producers.

A time-lag before oil companies respond to lower prices with weaker production may increase pressure on OPEC to cut its oil supply. The cartel last month decided to bolster the market.

According to the IEA, the oil-producers' group cut its oil production by 315,000 barrels a day in November, largely due to . However, at 30.3 million barrels a day, OPEC's output remained comfortably above its agreed output ceiling of 30 million barrels a day, despite weakening demand for its oil.

Georgi Kantchev contributed to this article.

Write to Sarah Kent at

Credit: By Sarah Kent

Subject: Petroleum industry; Supply & demand; Recessions; Crude oil prices; Petroleum production

Company / organization: Name: International Energy Agency; NAICS: 928120; Name: New York Mercantile Exchange; NAICS: 523210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635193263

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635193263?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Shares Knocked Off Highs on Oil Concerns --- Dow Industrials Still End Higher After Solid Consumer-Spending Data; 'Stocks Have Been Choppy'

Author: Driebusch, Corrie

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Dec 2014: C.4.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

U.S. stocks snapped a three-day losing streak with help from stronger-than-expected data on consumer spending.

However, a renewed slump in oil prices at midafternoon took the wind out of the stock market's sails, leaving broad market benchmarks finishing the day well below their session highs.

The Dow Jones Industrial Average climbed 63.19 points, or 0.4%, to 17596.34. Earlier in the session, the blue-chip index rose as many as 225 points.

The S&P 500 added 9.19 points, or 0.5%, to 2035.33, and the Nasdaq Composite rose 24.14 points, or 0.5%, to 4708.16.

Thursday's gains marked a reversal from the previous session's selloff that saw the Dow industrials post their biggest one-day loss in two months.

In recent sessions, stocks have had difficulty sustaining big moves upward or downward.

On Thursday, stocks rallied out of the gate, thanks to news showing Americans increased their shopping last month. U.S. retail sales rose 0.7% in November from a month earlier. Economists surveyed by The Wall Street Journal had expected overall sales to rise 0.4%.

But stocks' gains faded as the price of oil fell below $60 for the first time since July 2009. The benchmark U.S. oil price settled 1.6% lower at $59.95 a barrel.

Many energy stocks, which have taken a beating in recent months, held up in the face of the new slide in crude prices. The S&P 500 energy index ended the day up less than 0.1%. Still, energy stocks are down 19% over the past three months.

Investors noted that the good news on retail sales suggested consumers likely benefited from the lower cost of oil, and many say the benefits should continue to reverberate through the U.S. economy.

Investors viewed $60 a barrel as a key psychological level for oil prices because it is a round number where traders had built up a significant position. Now that traders have pushed through that level, analysts say the next target for oil prices is $58 a barrel in the short term.

Both the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries cut their 2015 demand forecasts in reports released this week. The International Energy Agency is due to release its own forecast Friday.

Gasoline futures fell 1.1%, or 1.74 cents, to $1.6244 a gallon. Diesel gained 0.7%, or 1.5 cents, to $2.0614 a gallon.

Consumer-discretionary shares rallied on the positive retail-sales data, with the sector up 0.7%.

"In essence, a decline in prices at the pump represents an increase in consumers' discretionary take-home pay, and it shouldn't be surprising that you should start seeing stronger retail sales," said Burns McKinney, portfolio manager at NFJ Investment Group, which manages about $41 billion. "Where you should see it the most is Wal-Mart or Costco, where sales are competing for the incremental or marginal dollar to a greater degree than some of the luxury retailers."

Shares of Wal-Mart Stores rose 85 cents, or 1%, to $83.83, and those of Costco Wholesale gained 1.16, or 0.8%, to 141.41.

European stocks were flat, with the Stoxx Europe 600 down just a fraction of a point.

The yield on the 10-year Treasury note rose to 2.178%, from 2.169% on Wednesday. Yields rise as prices fall.

The U.S. dollar strengthened against the yen and the euro.

In corporate news, shares of Staples jumped 1.29, or 8.7%, to 16.10 after Starboard Value disclosed in filings that it has built roughly a 6% stake in the company. The activist investor also boosted its position in Office Depot to about 10%. Shares of Office Depot rose 82 cents, or 12%, to 7.54.

Overseas early Friday, Japan's Nikkei was up 1.3%, Hong Kong's Hang Seng Index was down 0.4%, the Shanghai Composite Index was up 0.8%, Australia's S&P/ASX 200 was down 0.2% and South Korea's Kospi was up 0.3%.

---

Nicole Hong contributed to this article.

Credit: By Corrie Driebusch

Subject: Stock prices; Dow Jones averages; Daily markets (wsj)

Location: United States--US

Classification: 3400: Investment analysis & personal finance; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.4

Publication year: 2014

Publication date: Dec 12, 2014

column: Thursday's Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banki ng And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635203443

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635203443?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

World News: Falling Oil Prices Imperil Africa's Growth --- Currencies Plummet Alongside Energy Revenue; Governments Fear Cheaper Cost of Crude Will Choke New Investments

Author: McGroarty, Patrick; Hinshaw, Drew; Stevis, Matina

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Dec 2014: A.9.

ProQuest document link

Abstract:

Ugandan officials say they fear lower oil prices could deter companies, including Tullow Oil PLC and China's Cnooc Ltd., from following through on plans to invest up to $15 billion to develop the country's oil fields.

Links: 360 Link to Full Text

Full text:

Plunging oil prices are threatening Africa's economic ascent.

Recent oil and gas discoveries were hailed as a godsend for African nations aspiring to middle-income status. But billions of investment dollars are moving into projects just as crude prices have tumbled, raising fears that some may be put on hold.

Total SA, Exxon Mobil Corp. and other companies are at work on a $16-billion oil project in Angola that will be profitable only if oil prices average more than $70 a barrel, Citigroup analysts estimate. The price of Brent crude closed at a new five-year low on Thursday, falling nearly 1%, or 56 cents, to $63.68 a barrel.

Anadarko Petroleum Corp. and Eni SpA have spent more than $5 billion developing natural-gas fields in Mozambique that threaten to become much less profitable if global supply expands too rapidly. Ugandan officials say they fear lower oil prices could deter companies, including Tullow Oil PLC and China's Cnooc Ltd., from following through on plans to invest up to $15 billion to develop the country's oil fields.

Cheaper fuel will help many African countries suppress inflation by keeping energy import costs down. But the continent's biggest economies have staked their futures on robust prices for oil and gas. Pumping high-price crude has generated rapid economic growth and spending that spilled across borders.

Now, those flows are set to slow sharply. Capital Economics says falling commodity prices will cut growth across sub-Saharan Africa by one percentage point next year, to around 4%, the slowest rate since the late 1990s.

"It's bad for all of Africa," said Jack Allen, an economist at the research firm.

Nigeria is a case in point. Africa's top economy and crude producer has grown 7% a year for the past decade. As retail and telecommunications companies have taken off, the oil industry has shrunk to a more balanced 14% of economic activity.

But Nigeria's government revenue hasn't evolved with its economy. Oil still fuels more than 70% of the budget, leaving public institutions dependent on the ebb and flow of global energy prices. As Brent crude prices fell below $70 a barrel this month, Nigeria's naira currency plummeted to record lows.

Nigeria's Finance Minister Ngozi Okonjo-Iweala says the drop in oil prices could drag economic growth down by a percentage point to 5.3% in 2015.

Earlier this month, the central bank raised interest rates to draw back investors as the currency fell. The higher rates will now make it more expensive for the government to borrow.

Now Ms. Okonjo-Iweala is scrounging for new revenue to hold elections in February and fight the Islamist insurgency Boko Haram. She plans to raise taxes on yachts, private planes and sparkling wine. She has said she may even impose a mansion tax -- small steps toward filling a big hole.

"Undoubtedly, it's going to be tough times," she said.

Cheaper oil is also complicating nearby Ghana's efforts to dig out from deep trade and budget deficits. Ghana's cedi currency was tumbling even before oil prices started dropping. In August, the country requested a bailout from the International Monetary Fund that could be worth around $500 million.

Ghana is set to nearly double oil production from around 100,000 barrels a day to 190,000 by 2016 -- output the government hoped would finance road, power and port expansions to help the economy grow. Now it isn't clear where that revenue will come from.

Countries along Africa's Indian Ocean coast fear oil and natural-gas projects that have drawn more than $25 billion to the region over the past five years could look less attractive as energy prices fall.

Officials in Mozambique are speeding up legislation backing natural-gas projects by Texas-based Anadarko Petroleum and Italy's Eni. The Anadarko project alone could add more than $30 billion to the country's gross domestic product by 2035, according to Johannesburg-based Standard Bank Ltd.

"The recent fall in oil prices seems to be increasing the sense of urgency to close the deal," said Paul Eardley-Taylor, Standard Bank's head of oil and gas for southern Africa.

The head of Anadarko's business in Mozambique didn't respond to requests for comment, and an Eni spokesman declined to comment. Exxon Mobil referred questions about the Angolan project to Total, its partner in the development, which also declined to comment.

A Tullow Oil spokesman in London said the company has no plans to change its investment plans in Uganda or elsewhere in Africa. "We believe that such fluctuations in the oil price do not fundamentally change the value of these projects," said spokesman George Cazenove.

---

Nicholas Bariyo and Inti Landauro contributed to this article.

Credit: Patrick McGroarty, Drew Hinshaw, Matina Stevis

Subject: Economic impact; Crude oil; Petroleum production; Gasoline prices

Location: Africa

Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: Total SA; NAICS: 447190, 324110, 211111; Name: Anadarko Petroleum Corp; NAICS: 211111

Classification: 8510: Petroleum industry; 9180: International

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.9

Publication year: 2014

Publication date: Dec 12, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635203472

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635203472?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil's Drop Spills Into Other Assets --- Junk-Bond Funds See Large Outflow As Investors Run From Risky Debt

Author: Burne, Katy

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Dec 2014: C.1.

ProQuest document link

Abstract:

Tremors from the slide in oil prices that initially hit energy bonds now are being felt across the broader $1.3 trillion junk-bond market, investors and analysts said, causing hesitation among would-be buyers and a hurried reshuffling of bond portfolios as funds look to raise cash to meet redemptions.

Links: 360 Link to Full Text

Full text:

Corrections & Amplifications

PetroCap is an oil-and-gas fund that is in partnership with Highland Capital Management. A Money & Investing article Friday about outflows from junk-bond funds incorrectly said PetroCap is owned by Highland.

(WSJ Dec. 18, 2014)

Investors pulled nearly $1.9 billion from funds dedicated to low-rated corporate bonds in the past week, extending a retreat from risky debt amid a free fall in the price of crude oil.

The outflow is the largest weekly decline since the $2.3 billion withdrawal registered in the week ended Oct. 1, and follows $859 million that flowed out the week ended Dec. 3, according to fund tracker Lipper.

"Everyone is just selling," said Lane Britain, managing director at PetroCap, an oil-and-gas fund owned by Highland Capital Management.

Investors are selling junk bonds at the fastest clip in 18 months, according to data from Barclays PLC, and many are worried the upheaval could become a catalyst for more lasting weakness in high yield, particularly if growth slows or individual investors get spooked and see a reason to pull more of their money.

"Energy is falling out of bed and will drive the entire market lower," said Riaz Haidri, head of high yield at broker dealer Cantor Fitzgerald & Co.

The selling constitutes the third major reassessment of junk-rated debt this year and follows criticism from analysts and regulators that the yield investors could earn on the debt had fallen too low.

Previous retreats in July and in mid-October were characterized by large-scale selling as individual investors pulled their money, leaving large institutions to buy the debt at deep discounts.

The risk for junk-bond buyers is that the market continues to stumble and many of those investors remain wary of stepping in too early, in case the market registers another big decline.

The oil rout has put a dent in issuance volumes, causing a handful of energy companies to delay or cancel their borrowing plans. U.S. oil prices hit $59.95 a barrel on Thursday, the lowest since July 2009.

The drawdowns signal a growing wariness about owning risky debt, following a slide in oil prices that has left investors worried about energy's trickle-down effect on the economy. Energy bonds constitute 14% of the U.S. high-yield bond market.

This week, even nonenergy high-yield bonds have been hit as investors rushed to sell whatever debt they could to raise cash. Goldman Sachs Group Inc. is forecasting further downside in prices and lingering price volatility.

It is a bad time to see weakness in high yield: Dealer middlemen, who traditionally cushioned any selling pressure, have been re-evaluating their willingness to buy and sell bonds for their clients since the financial crisis and they have been especially reluctant to step in around year-end, raising costs for investors trying to complete trades.

In the week following bond market tumult on Oct. 15, dealer stockpiles of high-yield corporate bonds called "inventories" dipped below one-fifth of their average for the year, according to data from the Federal Reserve Bank of New York.

(See related article: "Crude Falls Below $60 a Barrel, Pressuring Stocks in U.K., Middle East; Oil-Linked Currencies Sink" -- WSJ December 12, 2014)

Credit: By Katy Burne

Subject: High yield investments; Bond markets; Junk bonds

Location: United States--US

Classification: 3400: Investment analysis & personal finance; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.1

Publication year: 2014

Publication date: Dec 12, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635203486

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635203486?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil's Drop Spills Into Other Assets --- Crude Falls Below $60 a Barrel, Pressuring Stocks in U.K., Middle East; Oil-Linked Currencies Sink

Author: Hong, Nicole; Cox, Josie

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Dec 2014: C.1.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Still, the impact of the decline in crude in the U.S. economy is limited. Energy investment accounts for 1% of U.S. growth, while consumer spending makes up 70%, according to UBS.

Other countries face more difficult challenges.

The rate cut sent the Norwegian krone to a five-year low against the euro and an 11-year low against the dollar.

Russia, meanwhile, raised interest rates to shore up the ruble.

The currency, which has repeatedly hit record lows against the dollar this year, has been battered by geopolitical tensions and resulting sanctions, but its decline has been exacerbated in recent months. About 50% of Russia's annual budget revenue stems from oil and gas exports.

Tim Ash, head of emerging-market research for Standard Bank, said Russia was "a rabbit caught in the headlights."

The central bank doesn't want to further spend down reserves by propping up the ruble and is only reluctantly raising rates for fear of pushing the economy deeper into recession, Mr. Ash said.

Mexico's central bank intervened in currency markets to bolster the peso for the first time in 2 1/2 years. The action came just two days after the country reactivated an auction system to support the peso, which on Thursday dropped to its weakest level against the dollar since March 2009. Oil-related revenue makes up a significant part of Mexico's federal coffers, although oil accounts for less than 10% of the country's exports.

In the Middle East, Dubai's market fell 7.4%. The main index in Abu Dhabi dropped 4.7%, Qatar slid 4.3% and Oman declined 4.2%.

---

Chiara Albanese and Anthony Harrup contributed to this article.

(See related article: "Junk-Bond Funds See Large Outflow As Investors Run From Risky Debt" -- WSJ December 12, 2014)

Credit: By Nicole Hong and Josie Cox

Subject: Crude oil; Dow Jones averages; Economic conditions -- United States--US

Location: United States--US

Classification: 9190: United States; 8510: Petroleum industry; 1110: Economic conditions & forecasts

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.1

Publication year: 2014

Publication date: Dec 12, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635203514

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635203514?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

U.S. Stocks Tumble; Dow Falls More Than 300 Points; Drop in Oil Prices Revives Growth Concerns

Author: Scaggs, Alexandra

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

Highlighting the weakness in economies outside of the U.S. on Friday was the latest report from the International Energy Agency, which cut its estimate for global oil-demand growth. The drop in oil prices should give consumers and companies a break on energy costs, said Will Braman, chief investment officer at Waltham, Mass. wealth management firm Ballentine Partners, which oversees $5 billion.

Links: 360 Link to Full Text

Full text:

U.S. stocks closed Friday with their biggest weekly decline in years, as the sustained drop in oil prices revived growth concerns.

The Dow Jones Industrial Average slid 315.51 points, or 1.8%, to 17280.83. For the week, the Dow has lost 3.8%, the biggest weekly loss in percentage terms since 2011, when an unusually severe winter in the U.S. tamped growth.

Investors fret that the 46% plunge in oil prices since June could be signaling that the global economy is slowing more quickly than data currently suggest. Growth in China, a major energy importer, has been slowing. The continued slide in oil prices also exacerbates worries about deflation in Europe and Japan, where policy makers are grappling with low inflation amid sluggish growth. Worried that the slowdown could spill over into the U.S., money managers on Friday sold stocks and piled into relatively safe assets such as Treasurys.

"We have increasing concerns about the global drag on the U.S. economy," said Jerry Braakman, chief investment officer of First American Trust, which manages $1.1 billion.

Mr. Braakman said he refrained from buying stocks during this week's losses, unlike previous selloffs this year, when he stepped in.

"This time, there is some reason for...fear," he said. "If global growth continues to spiral [lower], there could be a correction in the U.S. if we get dragged in."

The S&P 500 declined 33.00 points, or 1.6% to 2002.33, for its biggest weekly loss since 2012. The Nasdaq Composite Index fell 54.57 points, or 1.2%, to 4653.60. Treasury prices staged their biggest weekly rally since 2012, pushing down the yield on the 10-year note to 2.102%.

Strategists and investors said stocks were vulnerable to bad news after a seven-week rally that took major U.S. benchmarks to record highs.

"It's been a really healthy rally in U.S. stocks," said Michael Fredericks, who manages $9.9 billion in the BlackRock Multi-Asset Income Fund. "Valuations are expensive...and probably will stay expensive, as long as growth in the U.S. is superior to most other global markets."

Mr. Fredericks has been buying risky assets during the selloff--but since he deems stocks pricey, he is picking up high-yield bonds instead. That sector has sold off recently, as investors fret about potential defaults from energy companies with high levels of debt.

Other indicators also spooked traders. China on Friday reported lower-than-expected industrial production figures. The materials sector, which is closely tied to global economic growth, posted the steepest declines to close with a 2.9% loss.

"People are worried about what the collapse in crude oil shows about global demand," said Colin Cieszynski, senior market analyst with CMC Markets.

The persistent decline in oil prices sparked losses in the stocks of international oil producers. The Stoxx Europe 600 fell 2.6%, with the subindex of oil and gas companies staging the most severe declines. The currencies of Russia and Norway, both oil producers, were also under pressure.

Even with Friday's declines, the S&P 500 closed less than 4% below its record highs hit earlier this month. It had rallied 10% over the past seven weeks. And many investors point out that the U.S. economy, powered largely by its own consumers, could continue to hold up amid global weakness.

The drop in oil prices should give consumers and companies a break on energy costs, said Will Braman, chief investment officer at Waltham, Mass. wealth management firm Ballentine Partners, which oversees $5 billion.

"The fact that oil has come down so much makes us more optimistic on the world at large," said Mr. Braman. "I don't see why I would be taking risk off the table if I'm more optimistic on growth."

Consumer stocks outperformed the S&P 500 Friday, after a better-than-expected reading of consumer sentiment. The University of Michigan/Thomson Reuters consumer sentiment gauge rose to 93.8 from November's final reading of 88.8, above forecasts for 90.0. On Thursday, stocks gained after the Commerce Department said that retail sales climbed 0.7% in November, the biggest jump in eight months.

Falling oil prices have weighed down inflation, a key metric for the Federal Reserve in its interest-rate decisions. Strategists say that low interest rates in the U.S. have helped support the yearslong bull market in stocks. Investors are looking ahead to the Fed's meeting next week to determine the outlook for short-term interest rates.

On Friday, the Labor Department reported that a measure of U.S. inflation fell slightly more than expected. The producer-price index fell 0.2% in November, while a drop of 0.1% was forecast. Excluding volatile food and energy costs, producer prices were unchanged, while economists had expected a rise of 0.1%.

In Asia, Japan's Nikkei Stock Average gained 0.7% ahead of a weekend election that is expected to serve as a referendum on Prime Minister Shinzo Abe 's efforts to spur on economic growth.

Gold futures slipped 0.3% to $1222.00 an ounce.

In corporate news, MetLife Inc. shares fell 4.2% after it made another move to shore up its capital reserves, as it expects to soon be subject to stiffer capital rules from regulators. The company said it would buy back another $1 billion of shares.

Write to Alexandra Scaggs at

Credit: By Alexandra Scaggs

Subject: Petroleum industry; Prices; Stocks; Economic indicators; Financial executives; Energy industry; Natural gas utilities

Location: United States--US China

Company / organization: Name: International Energy Agency; NAICS: 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635252212

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635252212?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Fall in Oil Prices Threatens Africa's Economic Growth; Drop in Cost of Crude Depresses Currencies, Energy Revenues

Author: McGroarty, Patrick; Hinshaw, Drew; Stevis, Matina

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

Total SA, Exxon Mobil Corp. and other companies are at work on a $16-billion oil project in Angola that will be profitable only if oil prices average more than $70 a barrel, Citigroup analysts estimate. Ugandan officials say they fear lower oil prices could deter companies, including Tullow Oil PLC and China's Cnooc Ltd., from following through on plans to invest up to $15 billion to develop the country's oil fields.

Links: 360 Link to Full Text

Full text:

Plunging oil prices are threatening Africa's economic ascent.

"It's bad for all of Africa," said Jack Allen, an economist at the research firm.

Nigeria's Finance Minister Ngozi Okonjo-Iweala says the drop in oil prices could drag economic growth down by a percentage point to 5.3% in 2015.

Earlier this month, the central bank raised interest rates to draw back investors as the currency fell. The higher rates will now make it more expensive for the government to borrow.

"Undoubtedly, it's going to be tough times," she said in an interview.

To meet the IMF's terms, Ghana is taxing oil at the pump, which Ghanaians won't notice, since the tax is being rolled in as prices fall. But the long-term picture is murkier. Ghana is set to nearly double oil production from around 100,000 barrels a day to 190,000 by 2016--output the government hoped would finance road, power and port expansions to help the economy grow. Now it isn't clear where that revenue will come from.

"We are woefully short," said Sydney Casely-Hayford, a financial consultant and former adviser to Ghana's treasury.

"The recent fall in oil prices seems to be increasing the sense of urgency to close the deal," said Paul Eardley-Taylor, Standard Bank's head of oil and gas for southern Africa.

East African neighbors Kenya and Tanzania have signed exploration and extraction deals with Tullow as well as Statoil ASA, Exxon Mobil and others on the heels of substantial discoveries. But until those projects start pumping fuel, both countries remain net energy importers.

That's not a bad spot to be in as oil prices are sinking. Many governments spend billions of dollars a year subsidizing fuel prices for their citizens. High oil prices can push up inflation and the portion of meager incomes that many Africans devote to the fuel they depend on for transport and cooking.

Citing the global oil-price slump, Tanzania cut the price of gasoline, diesel and kerosene last week by about 7%.

But for countries banking on large oil projects, such benefits will be wiped out if prospective investors pause or retreat from exploration and production plans. "With decreasing oil prices, companies will now have to examine the opportunity costs even more so with respect to new frontier markets," says Ahmed Salim, a Dubai-based senior associate at Teneo Intelligence consultancy.

Falling prices for oil and other commodities are hurting African economies in other ways, too.

South Africa's central bank said Monday that falling fuel prices cut the country's import bill in the third quarter. But slack demand from China and Europe is pushing down the price of many minerals and crops, in addition to oil. That dragged down South Africa's gold and iron exports from the previous quarter.

As a result, South Africa's current-account deficit was wider than expected, sending South Africa's currency to a six-year low as investors retreated from the slowing economy.

Persistent weakness in the rand undermines any lift from cheap oil, said Nico Bezuidenhout, acting chief executive of South African Airways.

"You've got the break on the fuel price," he said. "But the currency has gone to the dogs."

Nicholas Bariyo in Kampala, Uganda, and Inti Landauro in Paris contributed to this article.

Write to Patrick McGroarty at , Drew Hinshaw at and Matina Stevis at

Credit: Patrick McGroarty, Drew Hinshaw, Matina Stevis

Subject: Petroleum industry; Natural gas; Crude oil prices; Petroleum production; Economic growth; Gross Domestic Product--GDP

Location: Ghana Nigeria Mozambique

Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Total SA; NAICS: 447190, 324110, 211111; Name: Tullow Oil PLC; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: CNOOC Ltd; NAICS: 211111; Name: Anadarko Petroleum Corp; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635252362

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635252362?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Repsol Advances in Takeover Talks With Talisman; Falling Oil Prices Putting Pressure on Smaller Energy Companies to Sell Assets, Consider Buyout Offers

Author: Bjork, Christopher; Dummett, Ben; Shayndi Raice

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]it faces a $900 million annual drain to keep operating in areas including the North Sea and Iraqi Kurdistan, according to Standard & Poor's, which in October cut the company's credit rating to triple-B-minus, one notch above junk.

Links: 360 Link to Full Text

Full text:

MADRID--Spanish oil company Repsol SA is circling beleaguered Canadian exploration firm Talisman Energy Inc., said people familiar with the matter, a sign that falling prices may be rekindling big energy mergers.

Repsol executives have traveled to Calgary, Alberta, to discuss a takeover bid in the range of C$6 to C$8 per share, one of the people said. A deal could be for as much as 8 billion Canadian dollars ($6.93 billion), that person said.

On Monday, Talisman said it has been approached by "a number of parties" including Repsol about various unspecified transactions. Talisman shares jumped 16% to $4.29 at 4 p.m. in New York Stock Exchange trading on Friday. The Financial Times earlier reported the two were close to a deal.

A near-halving of oil prices since June has pressured smaller energy companies to sell assets or consider takeover bids as they face trouble funding new exploration. Meantime, big companies have an increasing incentive to cut their spending on exploration, and instead use their stock or spare cash to acquire the already-producing assets of smaller companies. For small producers facing an approach by big rivals, "there is no bargaining power they have," said Fadel Gheit, an energy analyst with Oppenheimer & Co.

The value of oil and gas deals this year is up nearly 24% from last year to more than $300 billion, according to data tracker Dealogic. Last year's $242.54 billion of oil and gas deals was the lowest since 2009.

Oil-price crashes have historically led to a flurry of deal making. In the late 1990s, the industry was reshaped as BP PLC acquired Amoco and Arco, Exxon bought Mobil, and Chevron Corp. snared Texaco.

Talisman is one of the energy companies facing takeover pressure. Even after rising by more than a third on Friday, its share price is off 63% this year, compared with a 29% fall for Canada's main energy-stock index.

Talisman has struggled to pay off debt its previous management loaded up on to aggressively pursue overseas expansion. Now it faces a $900 million annual drain to keep operating in areas including the North Sea and Iraqi Kurdistan, according to Standard & Poor's, which in October cut the company's credit rating to triple-B-minus, one notch above junk.

Repsol, on the other hand, has money to spend. It received $5 billion in compensation earlier this year, after Argentina's government nationalized YPF SA in 2012, in which Repsol held a majority stake.

Repsol and Talisman said in July they were negotiating a possible deal. That came nearly a year after The Wall Street Journal , and that Talisman was one potential seller.

Talisman Chief Executive Hal Kvisle said last month that he , though he didn't specify a likely buyer by name. Talisman said it plans to sell off more assets this year to meet a $2 billion divestiture goal by mid-2015.

Chester Dawson and Justin Scheck contributed to this article.

Write to Christopher Bjork at , Ben Dummett at and Shayndi Raice at

Credit: By Christopher Bjork, Ben Dummett and Shayndi Raice

Subject: Petroleum industry; Acquisitions & mergers; Executives

Location: Calgary Alberta Canada

Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Talisman Energy Inc; NAICS: 211111; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: YPF SA; NAICS: 211111; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: Financial Times; NAICS: 511110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635285523

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635285523?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

How Crude Oil's Global Collapse Unfolded; Tracing the Plunge In Oil Prices Back to Texas

Author: Gold, Russell

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

Since June, the IEA has cut its demand forecast for 2015 by 800,000 barrels, while it says U.S. oil output will rise next year by 1.3 million barrels a day. [...]American refineries snapped up inexpensive crude from Texas and North Dakota, using it to replace oil from Nigeria, Algeria, Angola and Brazil, and almost every other oil-producing nation except Canada.

Links: 360 Link to Full Text

Full text:

Since the 1970s, Nigeria has sent a steady stream of high-quality crude oil to North American refineries. As recently as 2010, tankers delivered a million barrels a day.

Then came the U.S. energy boom. By July of this year, oil imports from Nigeria had fallen to zero.

Displaced by surging U.S. oil production, millions of barrels of Nigerian crude now head to India, Indonesia and China. But Middle Eastern nations are trying to entice the same buyers. This has set up a battle for market share that could reshape the Organization of the Petroleum Exporting Countries and fundamentally change the global market for oil.

On Friday, crude prices in five years after the International Energy Agency for the fifth time in six months. That signaled to investors that the world economy would struggle in the coming year, sending the Dow Jones Industrial Average , or 1.8%, to 17280.83. That's the Dow's biggest weekly percentage loss in three years.

Since June, the IEA has cut its demand forecast for 2015 by 800,000 barrels, while it says U.S. oil output will rise next year by 1.3 million barrels a day.

The drop in global oil prices from over $110 a barrel to under $62 on Friday has been portrayed as a showdown between Saudi Arabia and the U.S., two of the world's biggest oil producers. But the reality is more complex, involving Libyan rebels and Indonesian cabdrivers as well as Texas roughnecks and Middle Eastern oil ministers. It reflects both the surging supply of crude and the crumbling demand for oil.

And the oil-price plunge may not end soon. Bank of America Merrill Lynch says U.S. oil prices could drop to $50 in 2015.

The roots of the price collapse go back to 2008 near Cotulla, Texas, a tiny town between San Antonio and the Mexican border. This was where the first well was drilled into the Eagle Ford Shale. At the time, the U.S. pumped about 4.7 million barrels a day of crude oil.

In 2009 and 2010, the global economy improved, demand for oil increased and crude prices rose, creating a large incentive to find new supplies. In Cotulla and elsewhere, U.S. drillers answered the call. "There was, for lack of a better term, an arms race for oil, and we found a ton of oil," says Dean Hazelcorn, an oil trader at Coquest in Dallas.

Today, two hundred drilling rigs blanket South Texas, steering metal bits deep underground into the rock. Once drilled and hydraulically fractured, these wells yield large volumes ofhigh-quality oil; at the moment, the U.S. is producing 8.9 million barrels a day, thanks to the Eagle Ford and other new oil fields.

Americans aren't pumping more gasoline or otherwise using up all that new crude, and under U.S. laws dating back to the 1970s, it has been almost impossible to export.

As a result, American refineries snapped up inexpensive crude from Texas and North Dakota, using it to replace oil from Nigeria, Algeria, Angola and Brazil, and almost every other oil-producing nation except Canada.

OPEC sent the U.S. 180.6 million barrels in August 2008, a month before the first Eagle Ford well; in September 2014, it shipped about half that, 87 million barrels. That is about 100 fewer tankers of crude arriving in U.S. ports. They went elsewhere.

For a long time, it seemed like the world's growing appetite for oil would soak up all the displaced crude. By 2011 prices began to hover between $90 and $100 a barrel and mostly stayed in that range.

But earlier this year, another trend began to come into focus, catching Wall Street energy analysts and other market watchers by surprise. In March, many analysts predicted global demand for crude oil would grow by 1.4 million barrels a day in 2014, to 92.7 million barrels a day.

That prediction proved wildly optimistic.

Vikas Dwivedi, energy strategist with Macquarie Research, says a widespread deceleration of global economic growth sapped some demand. At the same time, several Asian currencies weakened against the U.S. dollar.

The cost of filling up a gas tank in Indonesia, Thailand, India and Malaysia rose, just as these countries were phasing out fuel subsidies. In Jakarta and Mumbai, drivers cut back.

"The fact that supply growth was strong shouldn't have taken anybody by surprise," Mr. Dwivedi says. But demand for oil "just fell off a cliff. And bear markets are fed by negative surprises."

Rising supply and falling demand both put downward pressure on prices. Throughout the summer, however, fears of violence in Iraq kept oil prices high as traders worried Islamic State fighters could cut the countrys oil output.

Then two events tipped the market. In late June, The Wall Street Journal reported the U.S. government had given permission for the first exports of U.S. oil in a generation. While the ruling was limited in scope, the market saw it as the first crack in a long-standing ban on crude exports. Not only was the U.S. importing fewer barrels of oil, it could soon begin exporting some, too. This news jolted oil markets; prices began to edge down from their summer peaks.

On July 1, Libyan rebels agreed to open Es Sider and Ras Lanuf, two key oil-export terminals that had been closed for a year. Libyan oil sailed across the Mediterranean Sea into Europe. Already displaced from the U.S. Gulf Coast and eastern Canada, Nigerian oil was soon replaced in Europe, too. Increasingly, shipments of Nigerian crude headed toward China.

Oil prices began to decline. By the end of July, a barrel of U.S. crude fell below $100. In early September, the IEA, a Paris-based energy watchdog, noted there had been a "pronounced slowdown in demand growth." A month later, oil prices fell below $90 a barrel.

By the middle of September, Petroleum Intelligence Weekly, a widely read industry newsletter, said both sides of the Atlantic Ocean were "awash in oil." Nigeria, it declared, "needs to find new customers for its light, sweet crude streams in Asia."

Saudi Arabia didn't want Nigeria to develop long-term relationships with refinery buyers in Asia. In late September, the kingdom decided to shore up its hold on them by, effectively, holding a sale. The Saudis cut their official crude price in Asia by $1 a barrel; within a week, Iran and Kuwait did the same.

Two weeks later, the IEA again lowered its full-year projection of demand growth by 200,000 barrels a day to a meager annual increase of 700,000 barrels, nearly half of what it expected at the beginning of the year. Oil prices fell nearly $4 a barrel on the news.

At this point, the oil market appeared to be in free fall. Of the 23 trading days in October, the price of crude fell by more than $1 on eight days. It rose by $1 on one day. Traders' attention turned to OPEC, which has traditionally played the role of market stabilizer by cutting production when prices fall and raising production when prices rise. Many OPEC members, reliant on the cash oil brings in to pay for generous social programs, didn't want to cut.

Saudi Arabia's powerful oil minister, Ali al-Naimi, was silent for weeks. The country had been burned in the past when it cut its oil output, only to see other countries continue to pump--and steal its customers.

And it was already feeling competition, says Abudi Zein, chief operating officer of ClipperData, a New York firm that tracks global crude movement. Colombia, which historically has sent most of its oil to the U.S., is finding its biggest buyer this year is China, a critical market for OPEC, he said.

"For the Saudis, Asia is their growth market," Mr. Zein says. "The Nigerians and Colombians are being kicked out of their natural markets in North America. Saudi had to do something."

At its regular meeting in Vienna in late November, the cartel kept production unchanged. U.S. and European oil prices fell another $7 per barrel.

On Wednesday, Mr. al-Naimi, the Saudi Arabian oil minister, was asked whether OPEC would soon act to cut exports. "Why should we cut production?" he asked. "Why?"

Write to Russell Gold at

Credit: By Russell Gold

Subject: Petroleum refineries; Petroleum industry; Supply & demand; Crude oil; Crude oil prices; Petroleum production

Location: Texas Nigeria India China Indonesia

Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: International Energy Agency; NAICS: 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635292332

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635292332?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Inflation Forecasts Will Drown in Oil; Investors Should Be Wary of Relying on Current Forecasts

Author: Lahart, Justin

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

Robert Barbera, co-director for the Center for Financial Economics at Johns Hopkins University, thinks economists are similarly underestimating gasoline's effect on consumer spending, and that they will be even more surprised by the strength of the December retail sales report than they were by this week's November report.

Links: 360 Link to Full Text

Full text:

The oil market rout could have a much more powerful influence on prices and spending in the U.S. than economists are letting on.

The continued slide in energy prices has led economists to revise their forecasts. With regular gasoline averaging $2.60 a gallon, and flagged to fall further, they have got inflation cooling in the months ahead. And since lower fuel prices will give people more money to spend on other stuff, they have got consumer spending going up.

But knowing how quickly the price environment can shift, economists can be a little cautious about how much they change their forecasts. That looks like the situation today.

Consider the Labor Department's consumer-price index. Economists generally estimate that after rising about 1.4% in the fourth quarter from a year earlier, inflation will soften to a little less than 1% in the first quarter. But a back-of-the-envelope calculation suggests it could cool a lot more.

Evercore ISI estimates that futures now point to gasoline at $2.31 a gallon in January, down 30% year over year. Assume it stays there through the first quarter, and that gets reflected in the Labor Department's index of consumer energy good prices (which is 93% gasoline). Assume also that prices for energy services like electricity merely stay flat with their October level. And have food, and other consumer goods and services change at the same year-over-year rates as they did in October.

The result: The CPI will rise about 0.2% in January and 0.1% in February--and slip 0.3% in March.

Investors relying on economists' estimates could be pretty surprised, as well.

Write to Justin Lahart at

Credit: By Justin Lahart

Subject: Gasoline prices; Consumer Price Index; Statistical data

Location: United States--US

Company / organization: Name: Johns Hopkins University; NAICS: 611310

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635292378

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635292378?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Norway's Central Bank Slips on Oil; Uncertainty About Growth Tops Agenda for Policy Makers

Author: Barley, Richard

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.

ProQuest document link

Abstract:

The rate path set out in the Norges Bank monetary policy report shows a 50% chance of another 0.25 percentage-point reduction, SEB notes.

Links: 360 Link to Full Text

Full text:

The plunging oil price is putting the skids under central bank policy.

Norway is an example. Norges Bank delivered to 1.25% from 1.5% this week due to fears about the potential damage that slumping oil could cause to the country's non-oil economy. Rates in the country are now back at the lows seen in the depths of the crisis in 2009. That is despite a falling Norwegian krone that should deliver higher inflation and a relatively benign economic outlook, coupled with high consumer debt levels that are cause for concern.

Norway's economy has been performing well recently. The non-oil economy expanded 2.7% in the year to September, an above-trend performance, Citigroup notes. Core inflation has run at 2.4% year-to-date and unemployment is low at 3.7%.--Brent crude is now down 44% year-to-date and shows few signs of halting its decline--clearly pose a challenge to an economy heavily reliant on hydrocarbons. Reduced oil-related investment could hurt firms and consumers. But the Norwegian krone, down 8.8% against the euro so far this year, offers some cushion.

For Norges Bank, however, concerns about growth and heightened economic uncertainty are clearly in the driving seat. In effect, the central bank is taking out insurance against a potentially worse outcome with its rate cut. More could be on the way: The rate path set out in the Norges Bank monetary policy report shows a 50% chance of another 0.25 percentage-point reduction, SEB notes.

And yet Norges Bank revised its inflation forecast up and thinks it will run above the 2.5% target in the near term; the weaker currency will push up import costs. The central bank is also assuming that the krone will once again appreciate, reducing upward pressure on inflation.

If that appreciation doesn't materialize, inflation could become a serious issue, J.P. Morgan notes. It also puts into focus the central bank's use of so-called macroprudential policy tools to rein in financial stability risks: With rates being cut, non-interest-rate policies will have to do more.

As a big energy producer and exporter, Norway clearly faces a particular challenge around the oil price. For other central banks, the lower oil price should boost growth.

But Norges Bank's rate cut fits into a broader pattern of central banks that are unwilling to take any risks around growth in the postcrisis world. With uncertainty about the outlook heightened, a move back to a more-normal rate environment will prove a slower process than thought.

Write to Richard Barley at

Credit: By Richard Barley

Subject: Central banks; Monetary policy; Banking

Location: Norway

Company / organization: Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110; Name: Norges Bank; NAICS: 521110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 12, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635304226

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635304226?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Petrobras Reports Some Financials, Delays Full Release Amid Probe; Oil Firm Also Says It Will Cut Back Ambitious Spending Project

Author: Kiernan, Paul; Connors, Will

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Dec 2014: n/a.

ProQuest document link

Abstract:

RIO DE JANEIRO--Brazilian state-run oil company Petroleo Brasileiro SA delayed for a second time the release of its third-quarter financial results Friday and said it would cut back on an ambitious spending program as fallout from a widening corruption scandal spreads.

Links: 360 Link to Full Text

Full text:

Instead, Petrobras reported "some economic-financial information" that it said wasn't affected by the investigation.

Among the indicators released Friday was sales revenue, which rose to 88.38 billion Brazilian reais ($33.3 billion) in the third quarter, up from 77.7 billion reais a year earlier, Petrobras said.

With its by uncertainty related to the investigation, Petrobras said it approved a series of measures aimed at preserving cash and shoring up liquidity. Among the measures is "the reduction in the pace of investments in projects," a potential setback in the company's efforts to continue developing huge oil reserves off Brazil's coast.

The company didn't say by how much it would reduce its investment pace. Previously, the company said it would spend more than $220 billion by 2018, primarily on ramping up offshore oil production.

"These actions ensure positive cash flow in the next year, considering oil prices around $70 a barrel and an exchange rate around 2.60 reais per dollar, and eliminate the necessity to raise capital in the market next year," Petrobras said.

Petrobras shares closed down 4.2%, to $7.11, in New York on Friday. Shares are down almost 57% over the last three months.

Petrobras also said Friday that it postponed to January 31 a series of covenants allowing creditors to anticipate the maturity of some of its debt if it fails to report unaudited earnings for the third quarter. Those covenants previously obliged the company to report earnings by the end of this year.

The company originally delayed its third-quarter results last month after its auditor PricewaterhouseCoopers declined to sign off on the results in light of the probe.

Petrobras is at the center of a widespread corruption scandal, in which from some of Brazil's biggest construction companies are alleged to have formed a cartel to artificially inflate the price of Petrobras contracts. .

In addition to Brazilian authorities, the and the U.S. Justice Department are conducting their own investigations into alleged wrongdoing at Petrobras.

Petrobras is also the target of a handful of class-action lawsuits in New York, where Petrobras shares are traded. The suits allege that Petrobras willfully misled investors about the alleged corruption.

Petrobras says it is cooperating with these investigations, and has set up an internal compliance division to deal with possible issues of impropriety going forward. The compliance division will be operational by the end of January, the company said Friday.

Light, sweet crude for January delivery fell $2.14, or 3.6%, to $57.81 a barrel on the New York Mercantile Exchange on Friday, the lowest settlement price since May 15, 2009. Prices slid 12.2% this week and are down 41% year-to-date.

Brent, the global benchmark, fell $1.83, or 2.9%, to $61.85 a barrel on ICE Futures Europe, the lowest level since July 14, 2009. Prices are down 10.5% on the week and 44% on the year.

Write to Paul Kiernan at and Will Connors at

Credit: By Paul Kiernan And Will Connors

Subject: Petroleum industry; Prices; Petroleum production

Location: Brazil New York

Company / organization: Name: Petroleos Brasileiro SA; NAICS: 211111; Name: Department of Justice; NAICS: 922130

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 13, 2014

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635366263

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635366263?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Stocks Tumble After Weak Oil Forecast --- Dow Drops 300 Points on Growth Fears As U.S. Boom Shuffles Export Markets

Author: Gold, Russell

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Dec 2014: A.1.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Since the 1970s, Nigeria has sent a steady stream of high-quality crude oil to North American refineries. As recently as 2010, tankers delivered a million barrels a day.

Then came the U.S. energy boom. By July of this year, oil imports from Nigeria had fallen to zero.

On Friday, crude prices dropped to their lowest level in five years after the International Energy Agency cut its forecast for global oil demand for the fifth time in six months. That signaled to investors that the world economy would struggle in the coming year, sending the Dow Jones Industrial Average tumbling by 315.51 points, or 1.8%, to 17280.83. That's the Dow's biggest weekly percentage loss in three years.

Since June, the IEA has cut its demand forecast for 2015 by 800,000 barrels, while it says U.S. oil output will rise next year by 1.3 million barrels a day.

And the oil-price plunge may not end soon. Bank of America Merrill Lynch says U.S. oil prices could drop to $50 in 2015.

Americans aren't pumping more gasoline or otherwise using up all that new crude, and under U.S. laws dating back to the 1970s, it has been almost impossible to export.

That prediction proved wildly optimistic.

The cost of filling up a gas tank in Indonesia, Thailand, India and Malaysia rose, just as these countries were phasing out fuel subsidies. In Jakarta and Mumbai, drivers cut back.

"The fact that supply growth was strong shouldn't have taken anybody by surprise," Mr. Dwivedi says. But demand for oil "just fell off a cliff. And bear markets are fed by negative surprises."

"For the Saudis, Asia is their growth market," Mr. Zein says. "The Nigerians and Colombians are being kicked out of their natural markets in North America. Saudi had to do something."

At its regular meeting in Vienna in late November, the cartel kept production unchanged. U.S. and European oil prices fell another $7 per barrel.

On Wednesday, Mr. al-Naimi, the Saudi Arabian oil minister, was asked whether OPEC would soon act to cut exports. "Why should we cut production?" he asked. "Why?"

Credit: By Russell Gold

Subject: Stock prices; Economic impact; Crude oil prices; Securities markets

Location: United States--US

Company: Organization of Petroleum Exporting Countries--OPEC

Classification: 9180: International; 3400: Investment analysis & personal finance; 1510: Energy resources

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.1

Publication year: 2014

Publication date: Dec 13, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635392874

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635392874?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Corporate News: Spain's Repsol Circles Beleaguered Canadian Oil Firm Talisman

Author: Bjork, Christopher; Dummett, Ben; Shayndi Raice

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Dec 2014: B.3.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

MADRID -- Spanish oil company Repsol SA is circling beleaguered Canadian exploration firm Talisman Energy Inc., said people familiar with the matter, a sign that falling prices may be rekindling big energy mergers.

For small producers facing an approach by big rivals, "there is no bargaining power they have," said Fadel Gheit, an energy analyst with Oppenheimer & Co.

Repsol and Talisman said in July they were negotiating a possible deal. That came nearly a year after The Wall Street Journal reported that Repsol had begun shopping for a North American oil company or assets, and that Talisman was one potential seller.

Talisman Chief Executive Hal Kvisle said last month that he expects to sell "one or two" assets by Dec. 31, though he didn't specify a likely buyer by name. Talisman said it plans to sell off more assets this year to meet a $2 billion divestiture goal by mid-2015.

---

Chester Dawson and Justin Scheck contributed to this article.

Credit: By Christopher Bjork, Ben Dummett and Shayndi Raice

Subject: Acquisitions & mergers; Bids

Location: Canada Spain

Company / organization: Name: Talisman Energy Inc; NAICS: 211111; Name: RepsolYPF SA; NAICS: 213111, 213112, 324110

Classification: 9180: International; 8510: Petroleum industry; 2330: Acquisitions & mergers

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.3

Publication year: 2014

Publication date: Dec 13, 2014

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635393034

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635393034?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Oil Prices Take Winners and Losers on a Wild Ride

Author: Zuckerman, Gregory

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Dec 2014: WSJ.1.

ProQuest document link

Abstract:

Sure, energy stocks are taking it on the chin, as are companies that seem far removed from the oil patch--among them debt-laden North Dakota oil drillers, energy-service companies and junk bonds. "If you participate in high yield through a fund or an ETF, you have substantial exposure to energy that probably won't be fully offset by the benefits to other industries of lower oil prices," says Marty Fridson, chief investment officer at Lehmann Livian Fridson Advisors, adding that the market anticipates an "oil-patch recession in 2016.

Links: 360 Link to Full Text

Full text:

For most Americans, this year's sudden collapse of oil prices appears to be unqualified good news. Oil prices have dropped 45% since June, amid surging output from U.S. shale fields, strong Saudi Arabian production and weak demand from Asia and elsewhere. They dropped 12.2% just last week, closing Friday at $57.81 a barrel. Analysts at Credit Suisse and other banks say it will take years before oil prices return to $100-a-barrel levels.

For drivers and those who rely on oil to heat their homes, falling crude prices act as an unexpected bonus or tax refund.

But for investors? It gets a bit more complicated. Sure, energy stocks are taking it on the chin, as are companies that seem far removed from the oil patch--among them debt-laden North Dakota oil drillers, energy-service companies and junk bonds.

A Boost for Retailers

But there are also potential winners, such as retail stocks. Last week, the Commerce Department reported that retail sales grew 0.7% in November, the sharpest rise in eight months. With gas prices below $2.50 a gallon in many parts of the country and oil continuing to weaken, that growth could continue. An improving employment outlook also helps.

Not all retail sectors are benefiting. While automobiles and parts sales are strong, as are clothing and accessories, food and beverage, along with sporting goods, don't seem to be getting much of an uptick.

Some analysts say the best bets are lower-end retailers like Wal-Mart Stores, Costco Wholesale and Big Lots. Falling gas prices provide big benefits to customers of these stores, analyst say, because they give low-wage earners more to spend on household goods and other items. Last month, Wal-Mart reported its first quarterly sales increase since 2012, citing falling gasoline prices as a factor. Big Lots, under new management since last year, also could benefit.

Falling fuel prices could hurt Costco, one of the country's largest fuel retailers. But analysts predict higher earnings for the company, partly because cheaper driving makes it more appealing to make longer shopping trips to warehouse stores such as Costco and Wal-Mart.

Airline profits will also rise, analysts say. Fuel represents about half of airline costs, and few are expected to pass the savings to customers through lower fares. American Airlines shares are up 25% in the past six months, less than Delta Air Lines's 35% jump, and some say American is a more reasonable value.

But a growing number of analysts warn investors to beware of the downside to falling oil prices. The energy industry, of course, will remain under pressure as long as prices drop. Some are adjusting their businesses. Last week, British oil giant BP said it would cut jobs and take $1 billion in restructuring charges, and others are trimmings spending plans.

But some investors, such as Doug Kass, author of "Doug Kass on the Market: A Life on The Street," warn that contagion from energy weakness can be unpredictable. "Most are underestimating the negative consequences of oil's spill," says Mr. Kass, who worries about energy loans from banks.

Banks exposed to energy include Oklahoma lender BOK Financial Corp. (BOKF), which has extended 19% of its loans, by value, to energy-related companies, according to BMO Capital Markets. Cullen/Frost Bankers (CFR) has extended 14%, Zions Bancorp (ZION) 8% and Prosperity Bancshares (PB) 7%. Loan demand for these banks could drop, some investors say.

Already, the junk-bond market is being crippled because 14% of those bonds are energy-related. "If you participate in high yield through a fund or an ETF, you have substantial exposure to energy that probably won't be fully offset by the benefits to other industries of lower oil prices," says Marty Fridson, chief investment officer at Lehmann Livian Fridson Advisors, adding that the market anticipates an "oil-patch recession in 2016."

"You can't sell just the energy portion of a high-yield mutual fund, so you have to sell the whole thing...and that puts downward pressure on the high-yield market as a whole," he says.

"Many think the fall in oil is good for the economy as gas prices fall and the consumer benefits," says Douglas Rothschild, president of PT Asset Management. "But the speed of the fall is bad because many companies can't adjust quickly enough...leading to layoffs, borrower defaults and trouble for the lenders."

Energy companies often hedge at least some of their oil production at higher prices and don't face repayment of the principal on their junk bonds for several years, suggesting there won't be an immediate wave of bankruptcies.

Nonetheless, tumbling oil prices have "created the largest new supply of distressed debt in a number of years...Almost overnight there's been more than 100 stressed and distressed credits," says Andrew Herenstein, co-founder of Monarch Alternative Capital, among the largest investors in distressed debt.

Oh Canada

The Canadian economy could get hurt if oil remains weak, because of the country's important energy industry. That's why newsletter writer Jared Dillian predicts weakness for Canadian Imperial Bank of Commerce (CIBC) and Toronto-Dominion Bank (TD).

Blaze Tankersley, chief market strategist at BayCrest Partners, says investors should be wary of manufacturer Dover (DOV), which has seen growth in its energy segment, and General Electric (GE), which also sells to energy companies.

Still, energy prices are just one factor in an investment outlook and shouldn't be the sole reason to adjust a portfolio. Falling prices can help consumers, for example, but if the housing market's recent weakness continues it could offset some of the benefits.

Credit: By Gregory Zuckerman

Subject: Junk bonds; Petroleum industry; Retail stores; Discount department stores; Crude oil prices; Tax refunds

Location: United States--US Asia

Company / organization: Name: Big Lots Inc; NAICS: 452112; Name: Costco Wholesale Corp; NAICS: 452910; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Delta Air Lines Inc; NAICS: 481111; Name: Credit Suisse Group; NAICS: 522110; Name: American Airlines Inc; NAICS: 481111

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Source details: Sunday Edition

Pages: WSJ.1

Publication year: 2014

Publication date: Dec 14, 2014

Section: US

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635580078

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635580078?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

How Cheap Oil Complicates Investing; While Retail Stocks Benefit, Others Take It on the Chin

Author: Zuckerman, Gregory

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

For drivers and those who rely on oil to heat their homes, falling crude prices act as an unexpected bonus or tax refund.

A Boost for Retailers

"You can't sell just the energy portion of a high-yield mutual fund, so you have to sell the whole thing...and that puts downward pressure on the high-yield market as a whole," he says.

Oh Canada

"The benefits of lower oil prices will not be evenly distributed, and it is important to think about countries that stand to benefit more because of higher consumption and/or less economic dependence on oil exports," according to a report by bond powerhouse Pimco. "The losers are oil exporters, including Norway, for whom commodity exports are some 20% of GDP, and Russia. On the other hand Korea, China, Japan, India and Thailand are net oil importers and will benefit from the sharply lower prices."

"The energy sector's effect on either market trend or earnings is not as significant as many might perceive," says Tobias Levkovitch, chief U.S. equity strategist at Citigroup. "While many investors have been raising the issue of the plunge in oil prices and its potential influence on earnings, capital spending, employment trends, equity markets and consumer activity, reviewing the data suggests that it is not the end all."

Write to Gregory Zuckerman at

Credit: By Gregory Zuckerman

Subject: Junk bonds; Petroleum industry; Retail stores; Discount department stores; Crude oil prices; Tax refunds

Location: United States--US

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 14, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635582866

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635582866?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

Gulf Stock Markets Tumble Again on Oil, Economic Jitters

Author: Jones, Rory

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]the benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years.

Links: 360 Link to Full Text

Full text:

DUBAI--Stocks in the Persian Gulf slumped again on Sunday, mirroring a similarly sharp selloff last week and all but wiping out year-to-date gains for some of the world's best performing equity markets this year.

again spooked investors in Dubai where the DFM General Index finished down 7.6%, extending Thursday's 7.4% rout. The gauge is now down 1.4% for 2015, after doubling in value last year.

The market rout extended across the region. The main index in Abu Dhabi dropped 3.6% on Sunday, Qatar slid 5.9% and Kuwait fell 2.9%. Saudi Arabia's market, the largest bourse in the region, retreated 3.3%.

Real-estate developers were particularly hard hit on Sunday. Emaar Properties, the region's biggest developer, fell 8% and Abu Dhabi's Aldar Properties fell nearly 10%. Dubai Parks and Resorts listed on the Dubai Financial Market on Wednesday and has since fallen 25% in three days of trading. Saudi Basic Industries Corporation, or SABIC, one of the world's biggest petrochemical firms, lost 1.3%.

The Organization of the Petroleum Exporting Countries--of which Saudi Arabia is the de facto leader-- not to cut current crude output levels and maintain a glut of supply in the market.

Saudi oil minister Ali al-Naimi last week reiterated that the oil producer wouldn't cut production despite the falling price of crude. As a result, the benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years. Adding to the bearish mood, the International Energy Agency cut its forecast for oil demand growth in 2015.

"Unless there is a positive catalyst for an increase in the oil price the market may continue to stay weak during the coming week," Dubai-based Al Masah Capital said in a note. "The severity of this decline could very well be explained by investors covering margin calls as leverage was used on the way up over the past year," it added.

Capital Economics said while oil's slump has caused anxiety among stock market investors, large foreign exchange reserves built up over the years means public spending by regional governments should continue.

"While we expect growth to soften in 2015-16, we don't think it will collapse," the consultancy firm said in a note to clients.

Write to Rory Jones at

Credit: By Rory Jones

Subject: Petroleum industry; Stock exchanges; Investments; Crude oil prices

Location: Qatar Kuwait Abu Dhabi United Arab Emirates Saudi Arabia Persian Gulf

Company / organization: Name: Aldar Properties; NAICS: 236220; Name: Emaar Properties; NAICS: 237210; Name: Dubai Financial Market; NAICS: 523210; Name: International Energy Agency; NAICS: 928120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 14, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635817081

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635817081?acco untid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

We Must Transport Our Shale-Oil Bounty With Safety; Each year railroads train more than 20,000 first responders in their communities on railroad hazmat emergency response.

Author: Anonymous

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.

ProQuest document link

Abstract:

[...]the U.S. Coast Guard must dramatically ramp up its spill-response capability throughout the Hudson estuary. Since every minute counts in a spill in a tidal river, the existing vessel in New York Harbor must be supplemented with upriver boats and equipment.

Links: 360 Link to Full Text

Full text:

The article (page one, Dec. 4) makes several references to a refinery owned by a subsidiary of PBF Energy Inc. PBF has had an open and informative relationship with the local community and governmental agencies regarding our rail operations. In addition to our efforts with the community, since earlier this year the company has followed a policy that it will allow only the much safer, new-design railcars to discharge at our facility. While we don't have control over rail movement in the oil fields or outside our facilities, we have been in continuous discussions with the railroads that service the Delaware community to emphasize our interest in running the safest operation possible.

Thomas D. O'Malley

Executive Chairman

PBF Energy Inc.

Parsippany, N.J.

In the Hudson River Valley, 1.6 billion gallons of Bakken crude oil travels via Albany, N.Y., annually by barge, tanker and rail, along one of America's most populous and biologically diverse estuaries. Empty tank cars have derailed in three accidents, and a tanker carrying Bakken crude downriver punctured in 2012, but luckily lost none of its 12-million-gallon cargo. Scenic Hudson, an environmental organization, has called for a ban on the transport of crude oil on the Hudson River until safe conditions can be established. Government officials have dismissed this as impractical.

Immediate steps are needed to prevent a catastrophic accident. New York's legislature must raise fees on transported crude to increase the Oil Spill Fund. And the U.S. Coast Guard must dramatically ramp up its spill-response capability throughout the Hudson estuary. Since every minute counts in a spill in a tidal river, the existing vessel in New York Harbor must be supplemented with upriver boats and equipment. The state should also require the companies profiting from crude transport to berth a response vessel upriver.

Ned Sullivan

President

Scenic Hudson Inc.

Poughkeepsie, N.Y.

Each year railroads train more than 20,000 first responders in their communities on railroad hazmat emergency response, as well as offer advanced crude oil-by-rail training at a specialized facility in Colorado. Railroads also maintain detailed emergency response plans, and in November the industry called on the federal government to issue railroad spill plan regulations similar to those governing pipelines. In addition, the rail industry has launched a mobile application that provides emergency responders immediate access to accurate, real-time information about railcars carrying hazardous materials on a train.

Edward R. Hamberger

Chief Executive

Association of American Railroads

Washington

Subject: Railroad transportation; Railroad accidents & safety

Location: Delaware

People: O Malley, Thomas D

Company / organization: Name: Scenic Hudson; NAICS: 813410; Name: PBF Energy; NAICS: 324110; Name: Coast Guard-US; NAICS: 928110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 14, 2014

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635890740

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635890740?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Commodities Go From Hoard to Floored; Oil and Iron Woes May Be Far From Over

Author: Lahart, Justin

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

In understanding the latest commodities selloff centered on oil, consider a raw material lurking in your kitchen: rice.

Economists think stockpiling plays a big role in commodity bubbles, but are only now getting the evidence needed to understand exactly how it works. One implication of what they are learning: Prices haven't bottomed yet.

A standard theory of how commodity bubbles form begins with an imbalance between supply and demand. This raises prices and prompts some stockpiling, due either to worries about having enough or hopes of selling for more in the future. This curbs supply further, pushing prices higher still. Cautionary stockpiling morphs into hoarding, and the bubble inflates.

Yet it is hard to see exactly how these bubbles play out, says Princeton University economist Harrison Hong, as commodity markets are complex networks of suppliers, middlemen and consumers.

When highs in 2011, it was clear hoarding was happening, but nobody knew how much. Big producers including India and Brazil didn't provide stockpile data. When The Wall Street Journal visited China's Shandong province that January, farmers were storing thousands of pounds of cotton in their homes. Cotton has fallen about 70% from its peak.

Recently, though, researchers have accessed a huge data set on consumer behavior. For the Nielsen Homescan Panel, a partnership between Nielsen and the University of Chicago Booth School of Business, 100,000 U.S. households record the bar codes on every packaged item they buy.

Working with University College London economist Áureo de Paula and New York University economist Vishal Singh, Mr. Hong used the Homescan data to , in rice. This started in late 2007 when India, worried about food security, banned rice exports. Fears of shortages emerged and panic buying ensued. The U.S. didn't face a rice shortage, but prices still shot higher, and people started to hoard. Costco Wholesale and Sam's Club even bulk purchases.

The economists found some surprises. For example, while one might think lower-income households are more prone to panic over rising prices, those with higher incomes hoarded the most. Maybe they watched the news more closely or just had more money to buy rice.

The really odd thing was that a bunch of households who hadn't bought rice before did so during the crisis, then never did again. They may have been reselling it, but more likely is that they just got swept up by the situation. Rice prices have fallen by roughly half since early 2008.

The takeaway: Commodity bubbles feed on irrational behavior and don't last forever. Eventually, high prices encourage lower consumption and more supply. Prices ease, and stockpiles are run down. Middlemen who were looking to profit on perceived shortages start selling to limit losses.

Maybe they weren't in a bubble, but the two largest commodity producing industries, oil and steel, are seeing something like that now as prices for crude and iron ore, used to make steel, tumble.

Now, imagine there was a bit more than just ordinary stockpiling going on. Driven by expectations that rising global consumption would keep outstripping supply, people got swept up into the same sort of scarcity mind-set as those peculiar rice hoarders.

Certainly, iron ore and other metals played a significant part as speculative collateral in the rapid boom in "shadow lending" in China that Beijing is now squeezing. In the U.S., there was an expensive land grab by exploration and production companies, financed by everyone from regional banks to private-equity firms, convinced that triple-digit oil was a given. That is now teeing up a potential crisis in the high-yield bond market.

As reality sinks back in, it is possible prices have a lot further to fall.

Write to Justin Lahart at

Credit: By Justin Lahart

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 14, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635914512

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635914512?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Fed Likely to Stare Down Oil-Price Drop; Officials Poised to Put More Weight on Economic Strength Than Low Inflation

Author: Zumbrun, Josh

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.

ProQuest document link

Abstract:

Fed Vice Chairman Stanley Fischer, speaking at a recent Wall Street Journal event, said that "if the labor market continues to strengthen and if we see some signs of inflation beginning to increase, then the natural thing is to get the interest rate up." The low inflation associated with falling oil prices could add to pressure on the European Central Bank and Bank of Japan to amp up easy-money policies, even as the Fed moves toward tightening.

Links: 360 Link to Full Text

Full text:

Much has changed in the U.S. economy since Federal Reserve officials last issued their economic projections, in September. Oil prices have fallen by more than one-third, the dollar has climbed 5.3% against a broad basket of currencies and about 800,000 more Americans have found jobs.

These developments present overlapping challenges as Fed Chairwoman Janet Yellen and her central-bank colleagues wrestle with shifting fundamentals at home and mounting jitters overseas. She will hold a news conference Wednesday, after the Fed's two-day policy meeting, to discuss the central bank's outlook and plans going into 2015.

Falling oil prices are a boost to the U.S. consumer. But lower prices also are putting downward pressure on already low inflation, potentially moving the nation further away from the Fed's objective of 2% annual increases in consumer prices.

If Ms. Yellen and her colleagues put more weight on the looming inflation drop, they will hold off on interest-rate increases, which are expected by mid-2015. If they put more weight on underlying economic strength, they will proceed as planned, or even accelerate their move.

The signs so far are that the Fed will proceed as planned.

"Falling energy prices are beneficial for our economy," New York Fed President William Dudley said in a speech earlier this month. Fed Vice Chairman Stanley Fischer, speaking at a recent Wall Street Journal event, said that "if the labor market continues to strengthen and if we see some signs of inflation beginning to increase, then the natural thing is to get the interest rate up."

Paul Edelstein, director of financial economics at IHS Global Insight, forecasts that if oil averages $60 a barrel next year--roughly its current level--the economy would grow 2.7% and unemployment would end the year at 5.5%, within the Fed's range of estimates for its longer-run goal.

But under that scenario, inflation would average just slightly above zero next year.

The Fed has stared down swings in the oil market before. Prices soared in 2008 and 2011, driving the consumer-price index as high as 5.6% in 2008 and 3.9% three years later. But the Fed ignored calls to tighten policy to tamp down prices.

An important wild card that could change the Fed's mind this time is not what happens to inflation today, but what the public expects it to do in the future. In the past, the Fed has put great emphasis on changing inflation expectations, the theory being that if households and businesses expect inflation to rise substantially or fall substantially, it will become a self-fulfilling prophesy when individuals and executives lock in price or wage contracts.

Market measures of inflation expectations have softened. One measure watched closely by the Fed, which tracks expected inflation starting five years from now and running five years from that date, has fallen below 2% for the first time since 2008. Minneapolis Fed President Narayana Kocherlakota dissented from the Fed's October decision to end a long-running bond-buying program, citing lower inflation expectations as potentially raising "doubts in households and businesses."

Of late, however, most Fed officials seem prepared to look through this development, noting that surveys of households suggest inflation expectations remain stable.

The globe's response to low oil prices presents another challenge for Ms. Yellen. The rest of the world, particularly the troubled eurozone, might not enjoy the same benefits because "oil is more important to our economy than it is to Europe," said Jay Bryson, global economist for Wells Fargo. "There's much more public transportation in Europe than there is here."

For the world's leading advanced economies, "it's clearly a benefit, but it's not like it's going to cause the eurozone to grow," said Mr. Bryson.

The low inflation associated with falling oil prices could add to pressure on the European Central Bank and Bank of Japan to amp up easy-money policies, even as the Fed moves toward tightening. That divergence in monetary policy could drive the dollar higher still, putting new strains on American exports.

There is a recent historical parallel. In the late 1990s, in an environment of economic stress in emerging markets, including Russia, Thailand and Korea, oil prices fell by more than half, from over $26 in early 1997 to under $11 by the end of 1998. The dollar strengthened, interest rates stayed low, and U.S. inflation remained muted. All the while, the U.S. labor market heated up, pushing the unemployment rate below 4% for the only time since the 1960s.

It's hard to imagine another American boom like that now, after so many years of slow growth. And it's worth remembering that if the U.S. gets one, the last round created a technology and stock-market bubble that burst by 2001, leading to more than a decade of economic turbulence from which the Fed and Americans are still recovering.

Write to Josh Zumbrun at

Credit: By Josh Zumbrun

Subject: Central banks; Monetary policy; Inflation; Consumer Price Index; Eurozone; Households

Location: United States--US

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 14, 2014

Section: Economy

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635914581

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635914581?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Emerging Markets See Equity Markets, Currencies Decline; Jitters Rise Over Falling Oil Prices, Fed Policy Outlook

Author: Hong, Nicole; Trivedi, Anjani

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.

ProQuest document link

Abstract:

"If the Fed indicates that interest rates are going to be raised earlier rather than later...that's likely to have a further negative impact on emerging markets," said Clem Miller, a portfolio manager at Wilmington Trust in Baltimore, which oversees $80 billion and has bearish bets on emerging-market stocks and bonds.

Links: 360 Link to Full Text

Full text:

Markets across the developing world fell on Monday, on heightened jitters over falling oil prices and U.S. monetary tightening.

Currencies were especially hard hit, with the Russian ruble and Turkish lira plunging to record lows against the dollar. The Brazilian real, South African rand and Indonesian rupiah also sank to fresh multiyear lows.

Analysts say there was no specific catalyst for the selloff, but a number of factors converged to put downward pressure on emerging markets. Global oil prices continued to tumble, exacerbating problems for oil-exporting countries like Russia and Colombia. The Federal Reserve is also scheduled to issue a statement on Wednesday, which could signal that the central bank is closer to raising interest rates. That would deliver a blow to emerging markets that have benefited from years of easy money from the Fed.

As investors scrambled to dump their risky assets, the selloff in emerging markets spread beyond oil exporters into countries like India and Indonesia, which had been relatively resilient in recent weeks.

"There's just a lot going on in emerging markets, and investors are having some difficulty absorbing that information and figuring out what will happen next," said Lucas Turton, chief investment officer of Windham Capital Management LLC in Boston, which manages $1.8 billion and cut back on its exposure to emerging-market stocks two months ago.

In afternoon trading in New York, the dollar was up 3.1% against the lira, with the Turkish currency trading at 2.3706 to the greenback. The real was off more than 1% at 2.6884 to the dollar, while the ruble plunged by more than 10% to trade recently at 65.615 to the dollar.

Investors may be pre-emptively selling emerging-market assets ahead of the Fed statement on Wednesday. The statement is likely to "reinforce the divergence between the policy stance of the Fed and other major central banks," said Mitul Kotecha, head of foreign exchange strategy at Barclays in Singapore.

The Fed is expected to raise interest rates next year as the economy improves, while central banks in Europe and Japan are pursuing strategies to stimulate growth and inflation. This divergence has caused the dollar to soar against currencies around the world in recent months.

Thai stocks were one of the biggest victims of the broader selloff on Monday, collapsing over 9% at one point before recovering. The plunge prompted the country's finance minister, Sommai Phasee, to urge investors to remain calm. "The fall is in line with overseas market movement," Mr. Sommai told reporters. "Trust me, if it can go down, it can go up."

Many investors are bracing for turmoil in emerging markets as the dollar strengthens, making it more expensive for these countries to pay back international debt, and as U.S. growth beats much of the rest of the world. For instance, Indonesian companies have issued $11.4 billion of foreign-currency debt so far this year, according to Dealogic, putting them at risk for what analysts call a "currency mismatch." This means these companies could struggle to pay off their dollar debts as their local currency, the rupiah, weakens in value against the greenback.

Stephen Jen, founding partner of hedge fund SLJ Macro Partners, said emerging-market currencies could "melt down" as investors accelerate their selling.

"Nothing the [emerging market] economies can do will stop these potential outflows, as long as the U.S. economy recovers," Mr. Jen said.

Write to Nicole Hong at and Anjani Trivedi at

Credit: By Nicole Hong And Anjani Trivedi

Subject: Emerging markets; American dollar; Interest rates; Stocks; Currency

Location: United States--US Russia Colombia

People: Abe, Shinzo

Company / organization: Name: Windham Capital Management LLC; NAICS: 523930

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 15, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635996296

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635996296?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Junk-Bond Worries Spread Beyond Oil; A Pullback From Junk Bonds Can Be Harbinger That Risk Is Being Reassessed

Author: Burne, Katy; Zuckerman, Gregory; Copeland, Rob

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.

ProQuest document link

Abstract:

Junk bonds returned 7.44% last year and 15.8% in 2012, Barclays said. Since June, investors have yanked more than $22 billion from funds dedicated to junk bonds, according to fund tracker Lipper.

Links: 360 Link to Full Text

Full text:

The oil bust is exposing cracks in the $1.3 trillion junk-bond market, putting pressure on a key source of corporate financing and potentially crimping economic growth.

U.S. junk-bond prices have fallen 8% since late June, according to data from Barclays PLC. One-third of that drop has come this month alone, putting the market on track for its worst annual performance since the financial crisis.

While much of the stress has been in the energy sector on the heels of the sharp decline in oil prices, lately the woe is spreading across the junk market.

Each of the 21 high-yield sectors in a U.S. junk-bond index tracked by J.P. Morgan Chase & Co. registered losses in the five days ended Dec. 9.

"Oil prices have crushed the energy sector and it's leaking elsewhere," said Andrew Herenstein, co-founder of Monarch Alternative Capital LP, which manages $5 billion and is among the largest investors in distressed debt.

Debt is generally deemed to be distressed when investors view it as at high risk of missing bond payments or of a restructuring, at least at some point.

A pullback from junk bonds is often a harbinger of a broader reassessment of risk across financial markets, raising the possibility that investors could turn more wary of stocks and other assets.

Skeptics warned earlier this year that the junk market was becoming overheated, pointing to the risk of a larger-than-expected retreat.

A raft of postcrisis rules have hit securities-dealing banks, hampering the ability of those middlemen to cushion a selloff, especially in risky assets. Many say the changing role of those dealers is exaggerating the price drops, raising the risk of indiscriminate selling, or "fire sales."

"The problem with high yield is often that investors have to sell what they can, not what they want to," said Peter Tchir, managing director at Brean Capital LLC, an investment bank and asset manager.

The junk selloff comes as investors are uneasy about the global economy and Federal Reserve interest-rate increases that many expect to begin next year.

Junk bonds, like stocks, have mostly proved resilient, bouncing back after modest pullbacks. Both these bonds, and stocks, could again resist a deep drop.

But some are betting this current junk-bond decline will deepen, if investors are caught off guard by a slowdown in growth, a corresponding rise in defaults and dealer difficulty in absorbing all the selling.

Joshua Birnbaum, the ex-Goldman Sachs Group Inc. trader who made bets against subprime mortgages during the financial crisis, now has more than $2 billion in wagers against high-yield bonds at his Tilden Park Capital Management LP hedge-fund firm, according to investor documents.

Some investors worry the selling could feed on itself, sending up yields, stalling issuance and prompting restructurings or bankruptcies, analysts said.

Weakening demand for junk bonds has investors demanding a more generous yield to purchase these bonds rather than safer debt. Junk bonds now trade at a yield of 5.28 percentage points above yields of comparable U.S. Treasurys, up from 3.23 points at their June low for the year.

Investors' "panicky logic" also includes some "nervousness" ahead of a meeting this week when the Fed may provide updated signals on interest rates, said Anthony Valeri, investment strategist at LPL Financial, which directly oversees or advises on $415 billion of assets.

U.S. high-yield bonds have returned just 0.78% this year, including price action and dividends, according to Barclays, putting the debt on track for its worst showing since 2008. Junk bonds returned 7.44% last year and 15.8% in 2012, Barclays said.

Since June, investors have yanked more than $22 billion from funds dedicated to junk bonds, according to fund tracker Lipper. Investors withdrew an additional $1.9 billion in the latest week ended Wednesday.

To be sure, the factors that have supported the junk-market rally since 2009 remain largely in place. The U.S. economy is growing, with job creation expanding last month at the fastest clip since the tech boom of the late 1990s, and interest rates and defaults remain low. Despite the issuance slowdown, financing remains broadly available and defaults are low.

What's more, high-returning investments remain scarce amid low yields on safer bonds, meaning that many investors retain the "reach for yield" mentality that favors risk taking in income-generating securities.

"These bonds have been beaten up tremendously and they're not all going to default," said Brendan Dillon, senior investment manager at Aberdeen Asset Management Inc. Mr. Dillon said he has added 1% to 2% to the firm's energy exposure within its high-yield funds because those bonds were oversold. Still, traders are scurrying to reposition.

Daily high-yield trading volumes earlier this month reached an average of $8.2 billion, said J.P. Morgan, just shy of their October record and up from the daily average of $5.6 billion in 2013.

Junk-bond issuance has slowed. Companies such as Dallas refiner Alon USA Energy Inc. have pulled deals. Units of casino and resorts operator Parq Holdings LP and food and beverage giant JBS USA also canceled planned bond sales this month, according to Leveraged Commentary & Data.

JBS didn't respond to a request for comment. Parq had no comment.

Still, some see a buying opportunity at hand. Investors will "try to sell all or a lot of their energy holdings somewhat indiscriminately...and when the dust settles some investors have an opportunity," said David Breazzano, chief investment officer at money manager DDJ Capital Management LLC, which oversees about $8 billion.

Matt Wirz contributed to this article.

Write to Katy Burne at , Gregory Zuckerman at and Rob Copeland at

Credit: By Katy Burne, Gregory Zuckerman And Rob Copeland

Subject: Junk bonds; High yield investments; Interest rates; Prices; Economic crisis; Stocks

Location: United States--US

People: Birnbaum, Joshua

Company / organization: Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: Tilden Park Capital Management LP; NAICS: 525990; Name: Monarch Alternative Capital LP; NAICS: 523920, 523930; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 15, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1635997343

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635997343?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

We Must Transport Our Shale-Oil Bounty With Safety

Author: Anonymous

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Dec 2014: A.12.

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

The article "Shale Oil's Secret Routes to Market" (page one, Dec. 4) makes several references to a refinery owned by a subsidiary of PBF Energy Inc. PBF has had an open and informative relationship with the local community and governmental agencies regarding our rail operations. In addition to our efforts with the community, since earlier this year the company has followed a policy that it will allow only the much safer, new-design railcars to discharge at our facility. While we don't have control over rail movement in the oil fields or outside our facilities, we have been in continuous discussions with the railroads that service the Delaware community to emphasize our interest in running the safest operation possible.

Thomas D. O'Malley

Executive Chairman

PBF Energy Inc.

Parsippany, N.J.

---

Ned Sullivan

President

Scenic Hudson Inc.

Poughkeepsie, N.Y.

---

Edward R. Hamberger

Chief Executive

Association of American Railroads

Washington

Subject: Railroad transportation; Railroad accidents & safety

Location: Delaware

People: O Malley, Thomas D

Company / organization: Name: Scenic Hudson; NAICS: 813410; Name: PBF Energy; NAICS: 324110; Name: Coast Guard-US; NAICS: 928110

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: A.12

Publication year: 2014

Publication date: Dec 15, 2014

Section: Letters to the Editor

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1636094206

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636094206?accountid=7117

Last updated: 2017-11-21

Database: The Wall Street Journal

European Stocks Extend Losses; Renewed Slump in Oil Prices Drags Down Stocks, Currencies Linked to Energy Prices

Author: Stubbington, Tommy

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

Full text:

The fallout from a renewed slump in oil prices jolted European markets Monday, dragging down stocks and hammering currencies linked to energy prices.

The slump in crude prices--the Brent benchmark is down more than 44% this year--is partly the result of supply glut, but has also stoked fears about weak growth in global demand prompting investors to retreat from risky assets.

On Monday, the Russian ruble, the most notable victim, by more than 10% to a fresh low of more than 65 to the dollar.

In equity markets, the Stoxx Europe 600 closed 2.2% lower after an early rebound faded. The index had slumped more than 5% last week amid jitters over and concerns that a is a sign of global economic weakness.

Those losses continued as an early , with mining companies and oil producers leading the declines.

"The relentless decline in oil prices continues to unsettle markets," said analysts at Barclays.

Also rumbled by the decline in commodities prices, the Indonesian rupiah hit its in a sharp slide. India's rupee also hit its lowest point since January.

With the recent declines further dragging on already-weak inflation, global central banks are coming under increasing pressure to stick to looser monetary policies for longer. The U.S. Federal Reserve will meet Wednesday.

"Investors will be hoping that the Fed can prove a calming influence," said Ian Williams, economist and strategist at brokerage Peel Hunt.

European indexes plunged, with Germany's DAX losing 2.7%, France's CAC 40 falling 2.5%, and London's FTSE 100 down 1.9%.

Earlier, worries about a had weighed on

In the U.S., the S&P 500 gave up early gains to trade 0.3% lower.

Greece's Athex index, which plummeted last week after the government brought forward a parliamentary vote for a new president, bucked the trend, climbing 1.5%. The first round takes place Wednesday, with that a failure by the government to secure victory for its nominee could trigger a general election--a worry while radical left party Syriza leads in the polls, although the most recent suggests .

Yields on Greek government bonds eased from their recent, highs having surged last week. The 10-year bond yield fell to 8.68%, reflecting a rise in prices.

French 10-year yields were a touch lower at 0.89%, showing little reaction to by Fitch Ratings.

In currency markets, the Japanese yen advanced after Prime Minister Shinzo Abe's in Sunday's snap election.

The dollar was down 0.8% against the yen at ¥117.85.

In commodities markets, gold was 0.7% lower at $1,214.60 an ounce.

Write to Tommy Stubbington at

Credit: By Tommy Stubbington

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2014

Publication date: Dec 15, 2014

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1636137341

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636137341?accountid=7117

Last updated: 2017-11-22

Database: The Wall Street Journal

Junk-Bond Worries Spread Beyond Oil

Author: Burne, Katy; Zuckerman, Gregory; Copeland, Rob

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Dec 2014: C.1.